While central bank digital currencies (CBDC) are becoming a hot political topic in the United States, central bankers on the other side of the Atlantic have been exploring what the technology really does. Based on recent findings, there may be several.

Following trials conducted by the Bank of England (BoE) and the Bank for International Settlements (BIS) Innovation Center in London, a summary of project findings It concluded that a well-designed digital currency could “enable a robust ecosystem to drive innovation and help meet the future needs of a more digitalized society.”

The experiment, called Project Rosalind, focuses on using application programming interfaces (APIs) in future central bank digital currency (CBDC) designs and examines more than 30 different use cases.

The researchers examined how well-designed APIs can enhance the user experience when making payments, and tested how CBDCs could be used to pay in stores, on mobile phones, via QR codes, and via a variety of other methods.

While many of these features are already possible with existing payment systems such as cards and cash, Project Rosalind has also found that digital currencies can allow users to have more “programmability” over their money, making features similar to smart contracts.

“The API allows individuals and companies to store a certain amount of CBDCs for a specific use and trigger a payment on terms they have agreed to in advance,” the researchers said.

Gilbert Verdian, founder and CEO of blockchain interoperability firm Quant, who is part of the vendor team for Project Rosalind, said in a release that the CBDC will enable “citizens and businesses to automate complex payments and processes and implement logic in money.”

“For commercial banks and other institutions, the opportunities to apply this programmability to create innovative new products that set them apart from challengers and competitors are nearly endless.”

The future of ‘Britcoins’

Although the project is a joint initiative between the BoE and London’s BIS Innovation Hub, the researchers are encouraging central bankers around the world to read up on their findings.

“We believe Rosalind can make a significant contribution to how organizations around the world think about and engage in the design of retail CBDC systems,” said Francesca Hopwood Road, Head of the London Center for the BIS Innovation Hub.

The experiment is based on a model where a central bank will issue currency and provide ledger infrastructure, while the private sector, such as commercial banks, will offer user services such as digital wallets.

While Project Rosalind focuses on the CBDC concept globally, it comes at a time when the UK is considering the creation of a digital pound, dubbed ‘Britcoin’ by Prime Minister Rishi Sunak. The BoE is currently invited to discuss responses to a consulting paper co-produced with Her Majesty’s Treasury Until June 30th.

No official decision has been made regarding Britcoin yet. But Dion Seymour, who is technical director of cryptocurrencies and digital assets at Andersen LLP, as well as a former adviser to the UK tax authority on cryptocurrency issues, told Decryption that the UK “want to take the lead in financial matters”, so it is likely to catch up to the digital pound.

“I think if the Bank of England and Her Majesty’s Treasury want to continue to be innovators in the money space they should do a CBDC,” he said. “I felt like it had to be the next step. It’s hard to say you’re an innovator if someone else is doing something you’re not.”