Bank of England to launch Digital Pound Lab in 2025 for CBDC testing

The Bank of England plans to launch the Digital Pound Lab in 2025 as part of its Central Bank Digital Currency (CBDC) design phase.

Collaboration with HM Treasury and global experts focuses on privacy, efficiency, and economic stability.

The lab will serve as a sandbox for testing APIs and exploring payment innovations with private sector participants.

“Ongoing experiments and proofs of concept during the design phase will continue to add value to the wider UK payments and technology sectors. The ‘Digital Pound Lab’ in particular will provide a platform for functional and technological experimentation with a broad range of private sector partners,” the report said.

Public engagement, including surveys and focus groups, has identified shortcomings in current payment systems.

Over 30 use cases tested in Project Rosalind showed improved retail CBDC functions and user benefits.

A blueprint for the digital pound will be developed, examining costs, benefits, and its distinction from existing payment methods.

Stakeholder collaboration includes banks, fintech firms, merchants, and charities to guide development.

The Labour Party supports the digital pound to ensure financial sovereignty and address privacy and inclusion concerns.

Privacy research with the Massachusetts Institute of Technology explores pseudonymisation and zero-knowledge proofs.

Consultation mechanisms include the CBDC Engagement Forum and Academic Advisory Group for focused feedback.

Key areas under review include offline payments, core ledger technology, and platform requirements.

The Bank will publish design notes outlining its framework for the digital pound to foster stakeholder discussions.

Monitoring of global developments and payment system trends will inform the Bank’s final decision on CBDC implementation.

Regulatory and technical challenges remain, requiring further analysis before a launch decision is made.