Introduction
The Bank of England and HM Treasury are continuing to explore the case for a digital pound – a form of central bank money that would complement existing ways to pay in an increasingly digital economy. No decision has been made on whether to introduce a digital pound. The current ‘design phase’ of the digital pound workplan runs through 2026.
Payments are evolving towards a more diverse, multi-money landscape – where households and businesses can pay and get paid in different forms of sterling interchangeably at equal value; whether with public money (such as cash and, potentially, a digital pound), commercial bank deposits, stablecoins or tokenised assets. Public money is the anchor of that multi-money system.
A digital pound could have an important role to play as one part of the UK’s emerging multi-money system – offering greater choice and faster, cheaper, and more innovative services. The multi-money system can support a flourishing digital economy and the Government’s National Payments Vision for a trusted, world-leading payments ecosystem delivered on next generation technology.
Over the past year, our focus has been on developing the blueprint – a detailed design for any potential digital pound – were one to be launched. The blueprint is expected to be published in 2026, supported by design notes that set out our emerging thinking on key issues and practical experimentation; particularly through the Digital Pound Lab. This work is contributing both to the development of a potential digital pound and to a deeper understanding of how public money could operate within a multi-money system.
All work will inform a joint, evidence-based assessment by the Bank and HM Treasury on whether to proceed with work to further develop a digital pound. In parallel we continue to monitor payment trends in the UK and abroad to inform the blueprint and our assessment. If the decision was taken to build a digital pound, it would only be introduced once Parliament had passed the relevant primary legislation.
This update summarises progress and sets out what is next, ahead of a decision on next steps in 2026.
What we have done
We 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
These activities support the next phase of the digital pound project and are part of wider work by both authorities on retail payments innovation.
Experimentation: Digital Pound Lab
In August we launched the Digital Pound Lab (the 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.
Phase 2 is now open for applications – terms of participation, and how you can apply to participate, are available at Digital Pound Lab.
Phase 2 allows industry participants to test innovative payments use cases, using a digital pound as the foundation, with potentially broader applicability across retail payments. Participants will have the opportunity to showcase their solutions and demonstrate the capability of those services and technologies.
The Lab provides access to a safe experimental platform provided by the Bank, with no real customers or money. Firms can build, integrate and run scenarios that reflect real-world conditions, considering both digital pound specific innovations and broader questions about payments in a multi-money context.
This exploration supports innovation and helps inform the ongoing development of a digital pound, as well as the evolution of modern payment systems.
It features a core application programming interface (API) platform built over a demonstration ledger, sample payment interface providers (PIPs) and wallet applications, and a smart‑contract platform operating alongside the core API platform – to explore interoperability between centralised and programmable infrastructures.
Beyond technology, the Lab offers a structured collaboration model. Participants from various sectors are using the platform provided by the Bank to develop and test their use cases. This diversity brings a range of perspectives and helps ensure the infrastructure reflects practical needs. Insights from the Lab feed directly into ongoing development of digital pound policy and technical design, including the blueprint and related design notes. In this way, practical experimentation informs the ongoing development of a digital pound and supports evidence-based decision-making and broader innovation in retail payments.
Policy and design
We have published a series of design notes that set out our 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.
Interoperability models
Interoperability is central to the multi-money system, where public money (such as a digital pound), commercial bank deposits, stablecoins and tokenised assets can be exchanged seamlessly, friction free and without any loss in value. This work is a key part of the Bank’s wider collaboration with other authorities and industry to deliver the UK’s next-generation retail payments infrastructure. 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 will continue to maintain access to cash for as long as the public demand it.
Product strategy
The product strategy design note outlines how a digital pound could be used for everyday payments, including at the point of sale. It is grounded in current retail payment trends while remaining adaptable for the future. It sets out a staged roadmap for intermediaries to add capabilities over time, with a clear method for prioritising what to enable at launch, were the decision to be taken to launch a digital pound. Were it to be deployed in future, this roadmap is intended to manage delivery risk, provide clarity for intermediaries and ensure a digital pound would be useful for users from day one.
Intermediary roles and scheme design
Robust frameworks are essential for fostering innovation. The intermediary roles and scheme rulebook design note 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.
Alongside this update, we have published two additional design notes:
Offline payments
Offline payments support scenarios where there is no internet connection or where that connection is not reliable or performant enough. The offline payments design note explains how deferred offline payments could work, similar to cards in transport and unattended terminals. The design remains flexible, allowing for future consideration of device offline payments, which are not present in mainstream retail payments today, but could unlock new possibilities over time.
Alias service
The alias service design note 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.
Engagement
We collect feedback from stakeholders across industry, academia and civil society on opportunities, risks and user needs in digital money. This input informs the digital pound design, experimentation in the Lab and the blueprint.
We are currently engaging with technical stakeholders to support technical design and assessment. This includes the CBDC Engagement Forum, Retailers Working Group, CBDC Academic Advisory Group and the Digital Pound Lab User’s Group, which provide structured, topic-specific input.
In September, we co-hosted the inaugural Innovation in money and payments conference with Warwick Business School, bringing together central banks, academia and industry to examine how innovation is reshaping money. Contributors included the Bank for International Settlements, European Central Bank, UK Finance, Transport for London and leading universities.
To reflect needs across the UK, we have engaged regionally in collaboration with regional fintech umbrella groups and local chambers of commerce. Recent engagements in Cardiff, Edinburgh, Leeds and York captured perspectives from varied communities and sectors.
Taken together, the project’s design phase work, experiments and engagement build a shared evidence base. That evidence is applied across adjacent payments work and reflected out to industry through our forums and the Lab. The outputs have wider benefits beyond the digital pound project and support delivery of the National Payments Vision.
Forward look: 2026
Our priority is to complete the blueprint and assessment. These will inform a decision by Bank of England and HM Treasury on next steps in 2026.
Alongside this, we will continue targeted experiments and engagement with stakeholders. These activities help us understand what works, what is viable and what may need to change. Our stakeholder engagement programme will continue, providing visibility of our emerging thinking. We will share key lessons from both phases of the Lab, including a summary of what we have learnt. In addition to these activities, we will keep a close watch on trends in the payments landscape and private sector innovation, including cash usage, advancements in UK payments systems and relevant international developments.
In summary, the digital pound project continues to progress, with a strong focus on evidence-based design, industry collaboration, and alignment with the UK’s broader payments vision. While no decision on next steps has yet been made, the work to date has strengthened our understanding of the opportunities and challenges and has laid robust foundations for any future decision. We remain committed to transparency, engagement, and ensuring that the digital pound, if introduced, would promote further choice, competition, efficiency and innovation in the evolving payments landscape.