Minutes of the CBDC Technology Forum – October 2023


Date of meeting: 13 October 2023

Item 1: Welcome

Tom Mutton (Chair) welcomed Members to the eighth meeting of the CBDC Technology Forum.

The Chair noted that a summary of responses to the Bank of England (the Bank) and HM Treasury’s Consultation Paper on the digital pound, as well as feedback on the Bank’s Technology Working Paper on the digital pound, would be published in due course.

The Chair also announced that Danny Russell had been appointed as Head of Digital Currency Technology at the Bank.

Item 2: Subgroup recap and clarifications

The Bank noted the creation of temporary subgroups to harness the experience, creativity and knowledge of Members in order to help explore the design options for the digital pound architecture. The Bank noted that subgroups did not have decision-making capacity, but the outputs from subgroups might be used to inform the Bank’s technology experimentation.

The Bank noted that they did not expect Members to conduct experiments or proofs of concept on the identified subgroup topics, although Members could do so on their own initiative if they wished. The Bank explained that they expected subgroups to explore a range of options when exploring a given topic, and where subgroups draw conclusions or make suggestions to the Bank, a justification for those conclusions should be provided. The Bank also noted that contribution to subgroups was considered an important part of Members’ ongoing Technology Forum membership.

The Bank noted that subgroup participants had asked for further information on the Bank’s approach to a digital pound, to help inform their exploration of the topics. The Bank stated that they cannot provide Members with non-public information. The Bank noted, however, that it will publish the findings of the Bank’s own experiments and proofs of concept.

The Bank noted that, following requests from Subgroups 1, 2 and 4, the Bank had created a hypothetical transaction privacy model using information already in the public domain through the digital pound Technology Working Paper, the digital pound Consultation Paper, and assumptions made in Project Rosalind, which was a joint project with the BIS Innovation Hub London Centre. The Bank emphasised that the hypothetical privacy model did not represent policy decisions for the digital pound, but the model could be used to guide subgroup discussions.

The hypothetical privacy model (see Annex below) featured categories of data of listed ecosystem participants including the Bank, Payment Interface Providers (PIPs) and payer and payee. The Bank explained that green represented data that was assumed to be visible; yellow represented data that might be visible based on user preference or based on transaction type; and red represented data which would not be visible.

One Member asked whether the Bank would see individuals’ purchases. The Bank reiterated that privacy was an essential characteristic for the digital pound. As such, individuals’ spending data would not be visible to the Bank.

The Bank provided input on the digital pound use cases that subgroups might consider as they explored their assigned topics. The Bank noted that, as set out in the Consultation Paper, the digital pound should support everyday payments whilst being a platform for innovation. Everyday payment use cases could include in-store point of sale, e-commerce, peer to peer, salary and, potentially, transit payments. As a platform for innovation, the digital pound system should be use-case agnostic, as well as support conditional payments, such as delivery versus payment (DvP) and payment versus payment (PvP). The Bank emphasised that the potential use cases were to support the work of the subgroups did not represent settled policy decisions for the digital pound.

One Member noted that a material amount of e-commerce depends on pull payments. The Bank noted that they expected Subgroups 2 and 4 to give their view on whether pull payments might be supported by the digital pound. The Bank further noted that there were other options, such as recurring requests for payment or auto-approve request-to-pay functionality, which could be explored for supporting e-commerce.

Item 3: Subgroup presentations

The Bank invited subgroups to present their objectives, expected outputs and timelines.

Subgroup 1 (Design options for privacy and the alias service) noted that they intended to look at privacy-enhancing technologies and aliases. Their discussions would be framed by the UK Data Protection Act 2018, and the output of their work would be a high-level conclusion on a technology solution that could meet privacy requirements for the digital pound. They noted that they expected to develop a reasonable understanding of the relevant topics by 2024 Q1, and draw conclusions in early 2024 Q2.

Subgroup 2 (Models of interaction between PIPs) noted that they would focus on alternative models of interaction between PIPs; potentially including direct communication, communication via a central router, and other alternatives. The output of their work would be a comparison of options, and a description of common themes relevant to the topic. They noted that they might also provide a conclusion on potential design choices. They expected to conclude their work by 2024 Q2.

Subgroup 3 (Core ledger technology) explained that their goal was to explore options for the core ledger design. The output of their work would be a list of options and trade-offs. This list would include a ranking of different ledger approaches based on the subgroup’s assessment of those approaches’ suitability to meet the technical requirements set out in the Bank’s Technology Working Paper. They recognised that the considerations around centralised and distributed ledger approaches are not binary, but rather, form part of a spectrum. They are, however, assuming that the core ledger would be centrally governed by the Bank, rather than a permissionless ledger.footnote [1]

Subgroup 3 noted that they would also share observations and feedback on the technical requirements that the Bank set out, and suggestions for future experimentation. They expected to deliver outputs of their work around 2024 Q2 or Q3.

Subgroup 4 (Requirements for providing a platform for innovation) explained that they would assess what a platform for innovation might look like and explore the possible technology requirements for one. Those considerations would include questions around where primitives should be hosted and what aspects of the architecture might be standardised.

The Bank thanked Members for their efforts, the quality of their work, and the energy and momentum built up from the subgroup discussions. They noted that the next meeting of the Technology Forum would likely be in January 2024.

Item 4: Closing remarks

The Chair closed the meeting and thanked Members for their contributions.


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