Bank of England to trial proof of concept CBDC wallet

CONTACTLESS CASH: Suppliers have been invited to design and produce a proof of concept CBDC wallet

The Bank of England has issued a tender inviting suppliers to design and produce a proof of concept central bank digital currency (CBDC) wallet, sample user and merchant websites and a back-end server that can be implemented as a prototype for future user testing of a digital pound in the UK.

The bank is not planning to develop a user wallet itself and intends to use the proof of concept to “make the CBDC product more tangible for internal and external stakeholders” and “explore the end-to-end user journey as a way to sharpen functional requirements for both the bank and private sector” including private sector wallet providers, the tender document explains.

The document also states that the proof of concept will need to demonstrate processes for wallet management, including sign-up and wallet configuration, uploading funds from commercial banks and a range of online transactions including merchant, peer-to-peer and scheduled payments.

Offline payments and know your customer (KYC) processes do not fall within the scope of the current project but the prototype will need to support the future exploration of these and other functionalities, the bank says.

It will also need to enable the bank’s own CBDC technology team to “demonstrate a sample wallet solution integrated into the eventual CBDC payments API”, “understand the design considerations around the sample wallet”, “understand how the future technology roadmap could assist in the development of a CBDC sample wallet” and “understand the design and technology considerations around the sample wallet that can have an impact on the technical design of other components of the CBDC”.

The initial project is expected to run for five months from January 2023 with an optional one-month extension and an overall budget of £200,000 (US$249,000).

The Bank of England formed a CBDC task force to explore digital currency options with the UK Treasury in April 2021 and laid out its core principles for a digital pound in June the same year.

Bank of England to trial proof of concept CBDC wallet was written by Tom Phillips and published by NFCW.

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