Barclays is exploring the use of a digital pound in the UK, focusing on merchant payments, securing delivery transactions, and ensuring interoperability with commercial bank money.

Barclays has set out a detailed framework for how a potential UK digital pound – a retail central bank digital currency (CBDC) issued by the Bank of England – could be used in the real economy, with a particular focus on merchant payments, securing “payment on delivery” transactions, and interoperability with commercial bank money. The work builds on the Bank of England and HM Treasury’s “platform model” for a digital pound, in which the central bank would run a core ledger and regulate access for payment interface providers (PIPs) via APIs, while private-sector firms like banks and fintechs build user-facing services on top. Barclays’ analysis is framed around achieving “functional consistency” between a digital pound and existing commercial bank deposits so that users experience both forms of money as seamlessly interchangeable within one common ecosystem. In its recent paper, Barclays examines three concrete use cases: a person‑to‑person push payment that can move funds between digital pounds and commercial bank deposits; a merchant‑initiated “request to pay” that allows retailers to trigger payments interoperably across both forms of money; and a funds‑locking mechanism that holds digital pounds until physical goods are delivered, then settles in either digital pounds or commercial bank money. To support these scenarios, the bank highlights three key technical capabilities: robust communication between PIPs and ecosystem participants such as merchants and financial market infrastructures (FMIs); the ability to lock and release funds seamlessly across CBDC and deposits; and reliable clearing and settlement between the two types of money. Barclays’ work, which follows its participation in the UK Regulated Liability Network experimentation phase, is intended to inform ongoing Bank of England design and experimentation, and to show how a digital pound could be introduced without fragmenting the UK money and payments system.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• Three considerations for design of the digital pound - OMFIF (omfif.org)
• Technology Spotlight - Barclays Careers (search.jobs.barclays)
• Functional Consistency across Retail Central Bank Digital Currency ... (arxiv.org)
• Progress update: The digital pound and the payments landscape (bankofengland.co.uk)

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• Interoperability
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• Payments