The UK central bank and the UK Treasury have announced the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to coordinate the exploration of a potential UK CBDC.

The Bank of England said a CBDC would be a new form of digital money issued by the UK central bank “and for use by households and businesses.”

It would exist “alongside cash and bank deposits” rather than replacing them.

“The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so,” said the central bank.

“The Taskforce aims to ensure a strategic approach is adopted between the UK authorities as they explore CBDC, in line with their statutory objectives, and to promote close coordination between them.”

The taskforce will be co-chaired by Bank of England deputy governor for financial stability Jon Cunliffe and the UK Treasury’s director general of financial services Katharine Braddick.