United Kingdom CBDC Tracker

The United Kingdom is currently in the pilot phase. Per the Bank of England’s official statement, “The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.” To inform its decision on whether to introduce a CBDC (often called a digital pound), the Bank of England has conducted theoretical research, collaborated with the Bank for International Settlements, and run experimental tests. However, while these efforts may only seem exploratory, it’s important to note that the Bank of England also said, “the Bank of England and HM Treasury judge there is likely to be a future need for, and benefits from, a digital pound.”

CBDC History and Development

In March 2020, the Bank of England published a CBDC discussion paper to outline “an illustrative ‘platform’ model of CBDC designed to enable households and businesses to make payments and store value.” In this model, the central bank would provide “a fast, highly secure and resilient technology infrastructure, which would sit alongside the Bank’s [real time gross settlement system] service, and provide the minimum necessary functionality for CBDC payments.” However, given “the wide ranging implications of CBDC for the Bank’s objectives and the wider economy, any eventual decision to introduce a CBDC would involve Her Majesty’s Government, Parliament and regulatory authorities, and engagement with society more generally.”

In April 2021, the Bank of England and HM Treasury formed a CBDC Taskforce “to coordinate the exploration of a potential UK CBDC.” However, the announcement of the taskforce was careful to note: “The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.”

In June 2021, the Bank of England published two updates: a summary of the responses to the 2020 discussion paper and a new discussion paper. “In short, the feedback we received has encouraged the Bank of England to continue examining the case for a CBDC,” wrote the central bank. “But at the same time, the Bank received clear feedback that the ‘use case’ for a CBDC, which might justify its introduction, needed further research, refinement, and articulation, to inform a comprehensive assessment of the pros and cons of what would be a major decision.” The new discussion paper reiterated that the Bank of England had not yet made a decision on “whether to introduce a CBDC in the UK.” However, the paper also focused heavily on stablecoin regulation.

In 2022, the Bank of England joined hands with the Bank for International Settlements to launch “Project Rosalind.” The project explored how “a universal and extensible application programming interface (API) layer could connect central bank and private sector infrastructures and facilitate retail CBDC payments.” Project Rosalind was divided into two phases. The first phase focused on designing, building, and testing an API platform. The second phase then focused on establishing use cases. In the end, the project developed 33 API functionalities and researched more than 30 retail CBDC use cases.

In February 2023, the Bank of England published a technical paper and a consultation paper. In the technical paper, the Bank of England considered different technology applications across five categories: privacy, security, resilience, performance, extensibility, and energy usage. The paper describes the preferred CBDC model as a “platform model” where the central bank “hosts the core ledger and an application programming interface (API) layer” that “would allow [approved] private sector firms… access to the core ledger functionality in order to provide user services.”

In the consultation paper, the Bank of England presented its ideas for a CBDC and requested feedback from the public (accepted between February and June 2023). As noted in the paper, “the Bank of England and HM Treasury judge that it is likely a digital pound will be needed in the future.” The Bank of England argued a CBDC is needed to support the “singleness of money” and to promote efficiency in payments. Among other things, the paper says that any CBDC created would require individuals to verify their identities, accounts to have capacity limits, and the CBDC itself to offer varying levels of programmability. Later in 2023, the Bank of England revealed that it received over 50,000 responses from the public—primarily due to concerns about privacy, programmability, and the decline of cash.

Government officials have also spoken out against the idea of a CBDC in the United Kingdom. Mervyn King, member of the House of Lords, has said that there was no apparent need for a wholesale CBDC and more broadly that there were no problems where a CBDC was the only answer. George Bridges, another member of the House of Lords, similarly said, “We have to be very clear about what problem we are trying to solve before we get carried away with the technology and the idea.”

In April 2024, the Bank for International Settlements announced Project Agorá, a project in collaboration with the central banks of England, France, Japan, South Korea, Mexico, Switzerland, and the United States. According to the announcement, the project is meant to “explore how tokenisation of wholesale central bank money and commercial bank deposits on programmable platforms can improve the monetary system.” Project Agorá moved to the next phase in May 2024 with a call for private sector participation.

In July 2024, the Bank of England published a new discussion paper to explain that it has “carried out work to explore a retail central bank digital currency (CBDC),” but a “decision has not yet been taken on whether to issue a retail CBDC, and a retail CBDC would not replace cash.” On the note of a wholesale CBDC, the central bank wrote that it “proposes a programme of experiments to test the use cases, functionalities, and prospective designs.”

Bank of England governor Andrew Bailey spoke about CBDCs in October 2024. During his speech, he said “why we must continue to prepare for retail CBDC” because we “have not yet seen enough evidence that the innovation will happen in commercial banks.” Emphasizing the point, governor Bailey said, “Absent innovation in commercial bank money, central banks may be left as the only game in town insofar as retail payments innovation is concerned. That is not my preferred outcome, but not one that we should rule out.”

In November 2024, HM Treasury published a National Payments Vision. HM Treasury wrote, “Reflecting the need to consider a range of innovations in this dynamic landscape, the Vision sets out the government’s commitment to explore a potential retail Central Bank Digital Currency, the digital pound. No decision has been taken on whether to launch a digital pound.” However, HM Treasury added, “the UK cannot risk falling behind, hence we are continuing rapid and careful exploration of all relevant emerging technologies.”

In December 2024, the Bank of England and Massachusetts Institute of Technology released a report that explored how a CBDC might use pseudonymization, zero-knowledge proofs, and multiparty functionalities to ease privacy concerns. However, while the paper demonstrates that privacy is technically possible, it also shows that privacy is politically improbable. The paper repeatedly acknowledged that the anti-money laundering regime would require CBDC users to have their data collected and surveilled.

The Bank of England published a progress update and a blueprint on January 14, 2025. Although the blueprint did not offer much useful information, the progress update featured several points worth flagging. First, the update claimed that the CBDC would be seamless, private, innovative, open, and interoperable, but the report never explained how that would happen. Second, the update outlined how the Bank of England has been experimenting with CBDCs. These experiments involved testing offline payments, point of sale hardware, and API functionality. Third, the update said, “the Bank and Government will assess the policy case for a digital pound and determine whether or not to proceed.” And finally, the update included an announcement that the Bank of England would soon launch a “Digital Pound Lab” to test the “potential capabilities of a digital pound, offering critical insights into the feasibility of different use cases.”

Human Rights and Civil Liberties Concerns

According to Freedom House and other reports, the United Kingdom ranks highly across nearly all metrics—earning a 93 out of 100 in the 2023 Freedom in the World report. Even then, however, it’s important to recognize that the creation of a CBDC could open the door to risks to financial privacy and financial freedom.

Big Brother Watch has documented in recent years how the UK police has made increasing use of facial recognition surveillance cameras. Unfortunately, a CBDC could be used to greatly expand surveillance by putting financial records on government databases by default. Financial transactions reveal people’s professions, relationships, locations, and so much more. It is very likely that governments would abuse this data.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.