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Business School academic joins CBDC Academic Advisory Group

Professor of Finance Darren Duxbury has recently joined the Central Bank Digital Currency advisory group, which aims to provide expert advice during the design phase of the digital pound.

10 January 2024

The Group provides a forum to engage stakeholders from academia and gather input from a range of fields relevant to CBDC.

CBDC – known in the UK as the digital pound – would be a new form of money used by households and businesses for everyday payment. It would be issued by the central bank - the Bank of England. The Bank of England and HM Treasury are considering the need for the digital pound in the UK and the Academic Advisory Group (AAG) will support the design phase.

Supporting discussions around the digital pound

Professor Duxbury’s research expertise lies in behavioural finance, specifically with regards to individual, household, and corporate decisions.

He is also a member of the Behavioural Finance Working Group and serves as an Associate Editor for the Review of Behavioural Finance.

These impressive credentials, as well as over 30 years of experience of researching and publishing in academic journals, puts him in good stead for this new position.

Headshot of Darren Duxbury, Professor of Finance at Newcastle University Business School

Professor Duxbury said: “To be able to advise on the development of a new form of money represents a fantastic opportunity to use my behavioural expertise to inform public policy. I am delighted to be asked to join the Academic Advisory Group to the Bank of England and HM Treasury.”

The Bank of England and HM Treasury will engage the AAG on the design phase of the digital pound. The Group will attend and participate in meetings to provide perspectives on their areas of expertise, as well as raise awareness about the work and encourage research on the CBDC through their networks.

Conducting research to inform the Group’s discussion

Professor Duxbury is currently leading an academic-industry research collaboration with NatWest Bank investigating the drivers of consumer payment behaviour, including attitudes and intentions towards cash, which is of relevance to the Group and its work. The research aims to provide a better understanding of the behavioural drivers of individuals’ attitudes towards, and intentions to use, cash relative to other forms of payment and the impact of exogenous shocks on such intentions.

This follows a recent study led by Professor Duxbury, that found decisions to use cash were influenced by a person’s level of financial literacy as well as how easily they form habits.

Explaining what he hopes to achieve as part of the AAG and his own contributions to the discovery phase, Professor Duxbury added: ”My research is all about understanding individual, household and corporate financial behaviour.

"In recent work, after taking account of socioeconomic background, we find compelling evidence that behavioural drivers, including, amongst other things, an individual’s propensity for habitual behaviour and their level of financial literacy, influence intentions to use cash.

“Furthermore, while payment intention habits might form, shifts in response to shocks to economic circumstance and security breaches demonstrate that such habits are not immune to change. Such behavioural insight will prove essential in accurately forecasting the speed, scale and steady state of adoption of the digital pound.”

British pound banknotes and assorted coins scattered, showcasing various denominations including £5, £10, £20 notes, and one-pound coins.