British Banks Experiment with Tokenized Deposits Amid Uncertain Future for Digital Pound
UK banks test tokenized deposits as the future of the digital pound remains in doubt
Several leading British banks, like Barclays, have started a trial to test tokenized deposits. The trial began this February with Mastercard and Visa involved.
This Bloomberg-reported trial aims to explore the potential of digital banking and is expected to continue for three years. Initial results are due by late summer.
The UK is seeing increased interest in tokenization, driven by a government-backed report urging local companies to adopt this technology to improve banking efficiency.
There's also a push for clear regulatory guidelines to support tokenization.
On the international front, the Bank for International Settlements (BIS) launched Agora, a project to connect central and commercial banks using a shared infrastructure.
This includes notable participants like the Bank of Japan and the Bank of France, focusing on enhancing cross-border payments.
Other projects in the BIS’s 2024 Innovation Hub include Project Aurum, which addresses privacy issues in retail CBDCs (Central Bank Digital Currencies).
The future of the digital pound, or 'Bitcoin,' remains uncertain despite the Bank of England's initial explorations in 2021.
The development of digital currencies and tokenization is part of a wider movement towards more advanced and efficient financial systems.
These advancements could lead to wider adoption of digital currencies and transformative banking practices in the UK and globally.
