Exploring the Digital Pound: The Bank of England’s Latest Update

The Bank of England and HM Treasury have shared their latest update on the progress towards a potential digital pound, a central bank digital currency (CBDC) that could serve as a base for the next generation of retail payments in the UK.

The two bodies are moving through the design phase, their focus remaining on developing a detailed blueprint for how a digital pound could work in practice. This includes rigorous experimentation through the Digital Pound Lab and continuous collaboration with industry stakeholders. Together, this work will inform a joint assessment by the Bank and HM Treasury, with a decision on next steps expected in 2026.

The update also introduces two new design notes that explore the technical and practical dimensions of a digital pound:

• Alias Service: Examines how using account aliases (such as email addresses or phone numbers) could simplify retail payments, enhancing usability and security. The paper also explores the Bank’s potential role in enabling such a service across the payments ecosystem.

• Offline Payments: Explores how the digital pound could support deferred offline transactions, including applications in transport, vending, and other unattended terminals. The paper also considers how device-to-device payments could operate securely without a live internet connection.

The exploration of a UK digital currency represents a great opportunity for innovation across the financial services sector. New payment architectures, trust frameworks and identity services will offer fintech innovators in Scotland and across the UK an opportunity to play a role in shaping and testing these emerging models.

We’re looking forward to collaborating on this initiative through the Digital TRUST Centre of Excellence that FinTech Scotland recently set up in collaboration with Edinburgh Napier University, the University of Edinburgh, the University of Glasgow and Scottish Enterprise.

Read the full update

Alias Service Design Note

Offline Payments Design Note