The Bank of England has joined six other central banks to issue a set of reports on the potential design and implementation of retail central bank digital currency (CBDCs).

The new reports build on the work of an initial report published in 2020 outlining key principles, with the latest looking at the policy options and practical implementation issues for CBDCs.

The reports explore how a retail digital currency could best meet users' future needs through “developing interoperable systems that support private innovation while preserving public trust.”

The group also includes the Bank for International Settlements (BIS), the Bank of Canada, Bank of Japan, European Central Bank, Federal Reserve, Sveriges Riksbank, and Swiss National Bank.

While none of these central banks has yet decided to proceed with a retail CBDC, they believe continuing to work on the topic is key, due to its wide-ranging implications, BIS said in a statement.

The reports underline that extensive cooperation and dialogue will be required to develop and run a CBDC, preserving the centrality of central bank money for future systems that anchor public trust and support public welfare.

The first report of this series explores how private-public collaboration and interoperability can be designed into CBDC systems.

It states that developing and running a CBDC system would be a major undertaking for any central bank. In particular, policies about privacy and access to payment data would need to be key design elements in order to maintain public trust.

The second report focuses on how a CBDC could best serve people and businesses in a fast-changing technological landscape. Lessons from previous payment innovations compiled in the report, show that success often requires harnessing network effects and not requiring users to obtain new devices.

Nonetheless, there would not be a "one-size-fits-all" solution and CBDC adoption strategies would need to consider multiple perspectives through public consultations, the report stated.

The third report outlines the possible impact of CBDC issuance on banking systems, in terms of intermediation capacity and overall resilience. Preliminary analysis highlights the importance of allowing the financial system time to adjust and the flexibility to use safeguards to influence CBDC adoption, according to BIS.

Commenting on the work, Sir Jon Cunliffe, Bank of England deputy governor for financial stability and working group co-chair, said: "This collaborative input from a group of central banks will help make sure that innovation in an increasingly digital world, the role the private sector plays in any CBDC system to help it meet future payments needs, and how the financial system might evolve are carefully evaluated. These reports make sure these issues are at the centre of the debate on CBDCs.”

Christine Lagarde, ECB president and chair of the group of central bank governors responsible for the reports, said: "Central banks have a responsibility to ensure that citizens have access to the safest form of money – central bank money – in the digital age.

"These reports are evidence that policy makers are enhancing their domestic projects with international cooperation, sharing ideas on the best technological innovations to provide fast, easy and secure means of payment in the 21st century.”

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