Bank Of England: Minutes Of The CBDC Engagement Forum - February 2025

Item 1: Welcome and competition law reminder 

The Chairs welcomed members to the meeting. The Bank read out a standard competition law statement.

Item 2: Progress Update on the Digital Pound

Diana Carrasco Vime provided an update on the ongoing design phase of the digital pound, focusing on two key deliverables: the Blueprint and the Assessment. She highlighted the publication of the first Progress Update note in January, which offered insights into the digital pound’s development and announced the launch of the Digital Pound Lab. Future publications will include Design Notes, Project Reports, and periodic Progress Updates.

Item 3: Regulatory and Consumer Protection Considerations

A structured discussion was held on intermediaries’ roles, focusing on the Scheme section of the Blueprint Framework Design note. Participants provided feedback which included:

• Primary responsibility for user interactions, KYC, and fraud prevention should lie with PIPs and ESIPs.
• Clear obligations and liability frameworks are necessary to prevent regulatory uncertainty.
• Financial inclusion should be prioritized, potentially requiring adjustments to existing regulatory frameworks.
• A public-private approach to consumer protection was suggested, with built-in safeguards for vulnerable consumers.
• Interoperability with existing financial systems is crucial.
• Commercial implications of fraud risk and the potential impact on merchants and consumers was discussed.

Item 4: Digital Pound Lab

Danny Russell introduced the Digital Pound Lab, which aims to test use cases and assess the viability of potential business models for a digital pound. The Lab will be structured in two phases:

• Phase 1 (Q3 2025): Testing Bank-selected use cases.
• Phase 2 (Q4 2025): Exploring use cases identified by industry.

Feedback from members included broad support for the initiative, queries about the extent of use case testing, and concerns about incentives for participation, especially for smaller firms.

Item 5: Offline Payments: Working Group Findings

Abbas Rana (HSBC) presented findings from the Offline Payments Working Group, setting out how a “Digital Cash” model might replicate the benefits of physical cash while maintaining security. Key features would include limited-value wallets, transaction privacy, and a cash-like experience for users. The Forum discussed some of the challenges and risks associated with this model, including fraud prevention, data privacy, credit risk considerations, and the technical feasibility of offline payments.

Item 6: Next Steps & Future Meetings

Feedback from this meeting will inform upcoming design notes and publications. The next Engagement Forum is scheduled May. Additional design notes and project reports will be released to maintain transparency and gather industry feedback. An open call for participants for the Digital Pound Lab is expected in early Q2 2025.

Attendees

Tom Mutton - Bank of England

Diana Carrasco Vime - Bank of England

Danny Russell – Bank of England

Clare Roberts – HM Treasury

Members

Arunan Tharamarajah, Head of European Banking and Payments, Wise

Arvin Abraham, Partner, Goodwin Procter

David Grunwald, Group Director of Innovation & Partnerships, NatWest

Esme Hodson, Member & Chief Compliance Officer, SC Ventures

Etay Katz, Partner, Ashurst LLP

Jorn Lambert, Chief Digital Officer, MasterCard

Martin McTague, National Policy Chair, Federation of Small Businesses

Mick McAteer, Founder and co-Director, The Financial Inclusion Centre

Muir Mathesion, CFO, Nationwide Building Society

Natasha de Teran, Member of the Financial Services Consumer Panel

Rhiannon Butterfield, Principal, Payments, Innovation and Resilience, UK Finance

Ruth Wandhofer, Member, PSR Panel

Simon Gaysford, Founder & Director, Frontier Economics

Simon Gleeson, Partner, Clifford Chance

Simon Yeoul, Co-Executive Director, Positive Money

Apologies

Adam Jackson, Director of Policy, Innovate Finance (sent alternate)

Bryan Zheng, Executive Director, Cambridge Centre for Alternative Finance (sent alternate)

Chris Owen, Policy Lead, British Retail Consortium

David McPhee, Chief Policy and Engagement Officer, PayUK

Harry Newman, Head of Market Initiatives EMEA, SWIFT (sent alternate)

Ian Stuart, CEO, HSBC Europe (sent alternate)

Jana Mackintosh, Managing Director Payments & Innovation, UK Finance (sent alternate)

Nabil Manji, Senior Vice President, Head of Crypto & Web3, Worldpay

Neha Narula, Director of the Digital Currency Initiative, MIT

Paul Bances, Head of Global Market Development of Blockchain, Cryptocurrency, and Digital Currencies, PayPal 

William Chalmers, CFO, Lloyds Banking Group (sent alternate)