Nowadays, great changes are taking place in payment methods, such as the sharp decline in cash use, the proliferation of private issued currency, and the rise of various new payment methods. In order to maintain monetary and financial stability, the Bank of England, like the central banks of other countries in the world, is committed to exploring and developing Central Bank Digital Currency (CBDC).

In 2015, the Bank of England proposed the digital Sterling plan, which opened the history of the Central Bank Digital Currency. At that time, it was proposed that if the Bank of England issued CBDC, it would compete with commercial banks for deposits and have an impact on commercial banks. Especially in the financial crisis, people will turn bank deposits into CBDC, so that bank deposits will be reduced, and it is impossible to generate money in the form of loans. In the following years, the Bank of England, the Federal Reserve and relevant scholars have done a lot of research and designed a number of solutions to solve this problem. The Bank of England wrote several important research reports in 2018, and the Federal Reserve also released research reports in 2018, such as Assessing the Impact of Central Bank Digital Currency on Private Banks by David Andolfatto in 2018, which believes that the issuance of CBDC will not cause difficulties for commercial banks. Various international organizations also actively participate in these studies. For example, the Bank for International Settlements (BIS) released the report named Central Bank Digital Currency in 2018, which proposed that CBDC should start with Wholesale Central Bank Digital Currency (wCBDC), and the International Monetary Fund (IMF) also issued a large number of research reports to encourage the central bank to issue CBDC.

The Bank of England believes that although CBDC brings many opportunities, it may also bring great challenges to maintaining monetary and financial stability. CBDC is closely related to the development of banks. If you want to introduce CBDC, you need to design it very carefully. At present, the Bank of England has not decided whether to introduce CBDC. It needs to seriously and timely consider these issues together with the government.