Bank of England Launches Lab for Advanced Testing of Digital Libra

• Bank of England tests Digital Libra in new lab.
• Public-private model guides the design of the Digital Libra.
• Future of UK payments under development.

The Bank of England (BoE) has taken another significant step towards developing a possible digital currency issued by the central bank (CBDC), announcing the launch of the “Digital Pound Lab”. The initiative aims to create a controlled testing environment to explore technological and operational aspects that could make up the Digital Pound, a potential UK digital currency.

The lab will be a space for practical experimentation, allowing private companies to interact directly with APIs, test new use cases and develop business models based on the Libra Digital infrastructure. The BoE highlighted that this collaboration with the private sector is essential to create a solid technological foundation that meets market and consumer demands.

In addition to the lab, the central bank has published the first in a series of technical notes detailing the key elements of the project. The proposed model combines a public platform managed by the central bank with regulated access for private companies. In this format, the Bank of England would be responsible for operating the central ledger, while private, authorised and regulated companies would interface with end users, including managing data and developing innovative services.

To keep pace with this development, the BoE is revamping its consultation and engagement structures. While the academic consultation and engagement groups will remain active, the technology forum will be phased out. The technical discussions will instead be deepened and centralized in the Digital Pound Lab, allowing for a more direct and focused approach to solving technology challenges.

The design phase, currently underway, is analyzing different technological, economic and regulatory aspects related to the implementation of a digital currency. This stage, expected to be completed by the end of 2024, will be decisive in assessing the viability and impacts of a CBDC on the UK financial system. According to the BoE, the decision on the launch of the Digital Libra will depend on the results of this analysis and the necessary legislative approval.

This project is part of a larger strategy to modernise the UK’s payments system, using digital technologies to ensure greater efficiency, security and accessibility in financial services.