The Bank of England has issued an update on its work regarding a possible digital pound. While no final decision has been made, the initiative is moving through its design phase, with a decision expected after 2026. Any launch would require primary legislation passed by the UK Parliament.

The digital pound would be a central bank digital currency (CBDC). It is intended to complement cash and commercial bank money, not replace them.  The aim is that it would support a multi-money ecosystem, including stablecoins and tokenised assets.  It also aligns with the UK's National Payments Vision for a modern, secure, and inclusive payments infrastructure.

The Bank of England's work is focused on three priorities:

• advancing technical work on shared public infrastructure and hands-on experimentation to support private-sector innovation in money and payments
• investigating how a digital pound and other types of digital money can interoperate with existing forms of money and payment systems
• gathering and integrating a range of stakeholder evidence to inform the design of any potential digital pound

In August, it launched the Digital Pound Lab, an experimental platform for industry to test use cases and explore potential business models for a digital pound and foster broader innovation in digital retail money. It has also published a series of design notes that set out its emerging policy and technical thinking:

• These design notes are intended to support early engagement with industry on specific design choices for a potential digital pound and wider retail payments innovation.
• The first note covers interoperability. The interoperability models for UK based payments design note sets out initial models for how a digital pound could operate alongside other forms of money and discusses the trade-offs involved. This work remains exploratory and ongoing. The Bank says that it will continue to maintain access to cash for as long as the public demand it.
• The Bank has also published a product strategy design note which outlines how a digital pound could be used for everyday payments, including at the point of sale.
• In addition, it has published an intermediary roles and scheme rulebook design note which presents initial thinking on the roles and responsibilities of intermediaries in a digital pound ecosystem. It outlines proposals for consistent standards in resilience, privacy and consumer protection, supporting responsible innovation and public trust in money, without compromising financial stability.
• As well as these, it has published an offline payments design note which explains how deferred offline payments could work, similar to cards in transport and unattended terminals. Finally, it has published an alias service design note which explores how account aliases could enhance retail payments and outlines key functionality for a digital pound alias service. It also explores the role the Bank, as operator of the core digital pound infrastructure, could take in enabling a digital pound alias service.

The Bank will update on next steps in 2026.