The arrival of the CBDC will not be on the blockchain

The Bank of England expects to begin research on the arrival of a retail CBDC by December. It will take at least five years before it is available to the public and once again the digital book form offered will be via an account. Its arrival on a blockchain will therefore not be soon!

The Hamilton project implements the CBDC

The Hamilton project, which implements the Central bank digital currency (CBDC), is supervised by the Bank of England, the Federal Reserve Bank of Boston and the Digital Currency Initiative (DCI).

According to them, no blockchain is needed for CBDC implementation. The distribution of a large number of pounds under the control of a single central actor does not correspond to the confidence assumption of the Hamilton project. This creates performance bottlenecks as in the Federal Reserve currency, digital currency is not a reliable solution.

In addition to that, the design of the CBDCs is granular. Tokens or accounts are limited and insufficient to choose the storage, access and intermediation of data in CBDCs.

The Bank of England may consider CBDC under certain conditions

The central bank does not allow tokens because they operate anonymously. To be credible at the level of banking institutions, digital identity must be integrated into the diffusion of CBDC. This operation takes a long time both in the development of its architecture and in the definition of the requirements, objectives and constraints related to the digital currency.

On the other hand, the actors of the cryptosphere are asking policy makers and regulators to define their expectations about digital currencies. Their goal is to provide a service that inspires widespread trust. For example on the client interface, wallets can support account balance display and coin specific display for the user.

Wholesale CBDC is more appropriate to the Bank of England’s expectations

Wholesale CBDC for businesses and institutions requires a full range of smart contrast capabilities or smart contracts and more complex instrument trading. Which makes it more appropriate than the retail CBDC and thus can easily be found on the blockchain.

This is because retail CBDC is only solvent when it comes to programmability and not smart contracts and blockchains. Keep in mind that the Bank of England and other central banks are considering two-tier systems to control the digital currency system while having it run by a third party (PIP). Which makes it a long process.


The Bank of England believes retail CBDC is more appropriate through the transfer of account balances. Wholesale CBDC is easy to implement on blockchain due to their feature. Either way, CBDC is a great alternative for transferring limited balances between offline devices, then from people to cash.

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The Cointribune editorial team joins their voices to express themselves on specific topics of cryptocurrencies, investments, metaverse and NFT, trying to best answer your questions.

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