Digital pound news

What are the use cases for offline payments and how would that influence design of the digital pound?

• What constitutes an offline payment and is it feasible to implement offline payments in CBDC?
• What risks would offline payment create and how can those be mitigated?
• How could offline payment functionality improve financial inclusion?
• What are other use cases for CBDC offline payments?
• As part of digital pound design, should offline payments functionality be developed as part of the core offering, developed as an overlay service, or not included?

What would merchants need from a digital pound design?

• What are the range of factors that would influence whether merchants accept digital pound payments alongside other payment methods?
• What are the options for enabling in-store acceptance of digital pounds (eg existing POS devices, QR codes) and what are their relative advantages or disadvantages?
• What are the requirements for enabling e-commerce acceptance of digital pounds?
• What account functionality would help merchants to manage any corporate limits on digital pound holdings?
• What issues might arise from digital pounds for retailers’ day-to-day payments and cash treasury management, and how might those be addressed?
• What are the potential scenarios for retailers running their own PIP or ESIP services?

How could we ensure privacy for individual users of a digital pound while maximising its potential benefits and use cases?

Privacy in this context means the protection of users' data (personal data and transaction data), and ensuring that users have control and visibility over who can process their data and for what purposes. As noted in the 2023 Consultation Paper, privacy is different from anonymity. The digital pound would not be anonymous because the ability to identify and verify users is needed to prevent financial crime. The Government and the Bank of England have committed that they would not access users' personal data in a digital pound ecosystem. If a digital pound were to be launched in future, primary legislation would need to be introduced first and this would guarantee users' privacy. Additionally, the Bank is exploring technological solutions to prevent it from being able to access personal data via the core ledger.

For the purposes of this work, "users" are the individuals using a digital pound, and this RFI seeks to explore the varying levels of privacy that a user would have towards the different private sector parties in the ecosystem, including the private sector wallet providers, the merchants, and potentially more participants in the payments processing chain. With this in mind, please provide comments on the following questions:

• Is there a range of levels and types of privacy that could be offered in a digital pound ecosystem that remains within the principles set out in the Consultation Paper?
• If so, what are the advantages and disadvantages of different options to the full range of actors in a digital pound ecosystem?
• How and where do existing legal and regulatory safeguards pose a challenge to different levels of privacy?
• How much and what kind of information should users have about how their data is used in a digital pound ecosystem, and what impact will this have on merchants and other participants processing payments?
• What are the main considerations for the introduction of tiered wallets, enabling consumers to choose different levels of privacy depending on access to services?