  Central banks are actively exploring central bank digital currencies (CBDCs)
by conducting research, proofs of concept and pilots. However, adoption of a
retail CBDC can risk fragmenting both payments markets and retail deposits if
the retail CBDC and commercial bank money do not have common operational
characteristics. In this paper, we focus on a potential UK retail CBDC, the
'digital pound', and the Bank of England's 'platform model'. We first explore
how the concept of functional consistency could mitigate the risk of
fragmentation. We next identify the common operational characteristics that are
required to achieve functional consistency across all forms of regulated retail
digital money. We identify four design options based on the provision of these
common operational characteristics by the central bank, payment interface
providers (PIPs), technical service providers (TSPs) or a financial market
infrastructure (FMI). We next identify architecturally-significant use cases
and select key capabilities that support these use cases and the common
operational characteristics. We evaluate the suitability of the design options
to provide these key capabilities and draw insights. We conclude that no single
design option could provide functional consistency across digital pounds and
commercial bank money and, instead, a complete solution would need to combine
the suitable design option(s) for each key capability and include common
ecosystem services provided by an FMI and TSPs.
