Bank of England’s “Britcoin” CBDC Advances Closer to Launch

The Bank of England (CBDC) has made significant progress towards the launch of its central bank digital currency, known as “Britcoin.” 

This advancement follows the successful conclusion of Project Rosalind, a trial study conducted in collaboration with the Bank for International Settlements.

The study shows the implementation of an API for retail CBDC transactions, revealing the creation of new financial products to combat fraudulent activities and the potential for cheaper payments.

With the creation of multiple API functionalities and exploration of various use cases for CBDC, the launch of “Britcoin” draws closer.

Project Rosalind Study Highlights CBDC’s Benefits

In July 2022, the Bank of England launched a “Project Rosalind” trial study in collaboration with the Bank for International Settlements.

Notably, the role of the Bank of England is to ensure monetary and financial stability in the UK, while the Bank for International Settlement fosters collaboration between central banks.

They jointly explored a groundbreaking interface in FinTech, revolutionizing the integration of digital currencies into private sector applications and central bank ledgers.

According to them, this study aims to examine how Prototypes of technology called Application Programming Interface (API) could be used in everyday transactions with digital currency.

Following the conclusion of a trial study, “Project Rosalind,” the Bank of England (BoE) is a step closer to launching its central bank digital currency dubbed “Britcoin.”

The report on phase two of Project Rosalind, published on June 16, highlighted the potential of a central bank digital currency (CBDC) to enable cost-effective and efficient payments among individuals. 

It also emphasized the opportunity for businesses to develop innovative financial products that can effectively combat fraudulent activities.

Throughout the project, 33 API functionalities were generated and examined, and 30 retail CBDC cases (peer-to-peer transfer, payment for goods and services, ETC) were scrutinized. 

According to BIS’s recent press release, the project focused on the development of a universal and adaptable API layer that could effectively connect central bank and private sector infrastructures. It aimed to enable seamless CBDC payments and foster innovation within the digital currency ecosystem.

According to BIS, “The project also experimented with and provided valuable lessons on many key aspects of a retail CBDC system, such as API design, privacy models, security, standards, offline payments, private sector programmability, and ecosystem roles and responsibilities,” 

Study Explores CBDC Programmability Amid Doubts, Highlights Secure API for Retail Payments

Critics have expressed doubt about CBDC programmability (ability to set rules or conditions for how a CBDC can be used). 

However, the study suggests that a well-designed API layer can enable a central bank to interact with the private sector and ensure secure and beneficial retail CBDC payments.

The head of the BIS London Innovation Hub, Francesca, said in a press release that “the objective is to explore how this interface could best enable a central bank ledger to interact with private sector service providers to safely provision retail payments.”

Francesca added that the project aims to study and analyze the most effective methods for establishing a strong ecosystem by conducting these experiments.