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The Bank of England (BoE) is one step closer to launching its central bank digital currency (CBDC), dubbed “Britcoin”, after completing a pilot study called Project Rosalind.
The Bank for International Settlements (BIS), along with the Bank of England, launched a joint experiment in July 2022 to explore how Application Programming Interface (API) prototypes can be implemented in CBDC retail transactions.
A June 16 report summarizing Phase 2 of the Rosalind project says CBDC can make payments between individuals cheaper and more efficient, allowing firms to create new financial products that help reduce fraudulent financial activity.
Overall, the study developed 33 API functions and explored “more than 30 retail use cases for CBDC.”
In addition to looking at how CBDC would work on smartphones, retailers, and online stores, the study also explored the concept of “programmability,” a term that refers to setting up digital money to behave in a certain way when certain conditions are met.
The ability to program a CBDC has been met with considerable skepticism, with critics arguing that a CBDC can be programmed to “work against” those who use it.
Overall, the study concluded that a “well-designed” API layer could allow a central bank to work with the private sector to “securely deliver” retail CBDC payments.
Project Rosalind, from the #BISInnovationHub London Center & @bankofenglandexplored how a universal and extensible #API layer could connect central bank and private sector infrastructures and facilitate retail #CBDC payments https://t.co/HL7EmI7RWx pic.twitter.com/kDeo0yhrsR
— Bank for International Settlements (@BIS_org) June 16, 2023
“The Rosalind experiment advanced central bank innovation in two key areas: by examining how the API layer can support a retail CBDC system and how it can facilitate secure and reliable CBDC payments through a variety of use cases,” said Francesca Road, Head of BIS London Innovation Hub in a press release.
Despite the positive results obtained under the Rosalind project, Bank of England Deputy Governor John Cunliffe said that there are still “several years” before a final decision on the launch of a CBDC in the country is made.
Related: Privacy to Consider in ‘Potential Retail CBDC’ – Treasury Official
According to a June 16 Bloomberg report, Cunliffe told attendees at the Politico Global Tech Day conference that the chances of the CBDC project coming to fruition are currently “seven out of ten.”
On the same day that the results of the Rosalind project were published, enterprise blockchain Quant Network announced its supplier role in the study. This announcement caused the price of Quant QNT’s native token (QNT) to rise by more than 20% from $96 to $117 within 12 hours.