Bank of England Building Payments Network to Support a Potential Digital Pound

The Bank of England's upcoming settlement service is being designed to support a possible central bank digital currency (CBDC).

• CoinDesk has learned the BoE will ensure its redesigned real-time gross settlement service (RTGS), the payments network used by U.K. financial institutions, can be forwards compatible with CBDCs, such as a digital pound.
• The new settlements system is being designed that the bank could "bolt on" a facility for digital currency transactions, should it decide to support a CBDC.
• Modules for other future capabilities, as well as the digital pound, are also being considered for the upcoming settlement system.
• RTGS is a key component in the U.K.'s financial infrastructure – it's where institutions hold their sterling accounts and acts as the main channel for the BoE to inject liquidity into the economy.
• On average, RTGS settles more than £685 billion ($900 billion) worth of transactions each working day.
• The BoE announced Thursday it had chosen Irish tech consultancy firm Accenture for a £150 million ($195 million) contract to redesign the payments network.
• In a statement, Accenture said the new RTGS system would adapt to the changing financial system by providing access to more firms, as well as greater interoperability and functionality.
• The new RTGS system is expected to go live in 2022.
• Earlier this month, BoE Governor Andrew Bailey said the 400-year-old central bank was seriously considering whether to launch a CBDC.
• Officials have previously said the BoE was open to the idea of private companies having a greater role in the issuance of a digital pound, insofar that they stick to the bank's design and policy principles.

See also: Canada’s Central Bank Is Serious About Designing a CBDC, Job Posting Reveals