Digital FMI Consortium launching sterling-backed stablecoin scheme in October
The UK will now join a list of countries looking to test stablecoins as a means of payment
The Digital FMI Consortium has been launched to test the real-world usecases for stablecoins and central bank digital currencies (CBDCs).
The groupsays it plans to start its testing with cross-border payments using its own sterling-backed stablecoin ‘dSterling’.
A stablecoin is a cryptoasset that is tied to an external asset, like a fiat currency, to maintain its value.
Digital FMI is the body behind Project New Era, the UK's first privately-led Digital Sterling (dSterling) stablecoin pilot scheme that is set to be unveiled in October this year and will continue for the next 12-18 months.
Focus of the pilot project will revolve around evaluating the current digital currency ecosystem and how it coexists with existing forms of regulated money
Digital FMI coordinated by the Boston Consulting Group and paywith.glass and is made up of financial institutions including IBM, Finastra, FInClusive, Ibanera among others.
Advisors include Rosa & Roubini Asscosciates for macroeconomic advisory, Simmons & Simmons for legal council and Farrant Group with strategic communications.
Kunal Jhanji, Managing Director and Partner at Boston Consulting Group, said: "The world is undergoing a financial revolution from which there is no turning back."
Jhanji has called on "the industry to now come together" to assist lawmakers and central banks design the "biggest change we will see in the payments ecosystem in our lifetimes."
Brunello Rosa, chief executive officer and head of research at Rosa & Roubini Asscosciates said: "Currently, 105 countries are explopring paths towards a CBDC".
This comes in light of the UK seeking to become a "global crypto hub", Rosa explains.
In July, the recently appointed Chancellor of the Exchequer, Nadhim Zahawi introduced a new Financial Services and Markets Bill (FSMB) that intends to bring stablecoins into the remit of UK regulators.
Zahawi said: "[The bill] reinforces the UK's position as a leading centre for technology as we safely adopt crypto assets."
Not only has the UK been working bringing stablecoins into the scope of regulators but the ECB recently published a paper declaring CBDCs to be the "holly grail" of cross-border payments.
Across the Atlantic, the Federal Reserve too seems to be making preparations for the launch of its tokenised Fed-dollar.
Goveror Bowman announcing last week that the worlds most eminent central bank was looking to allow traditional banks to issue stablecoins.