- Bank of England still debating the creation of national digital currency
- A CBDC could reduce the share of privately issued fiat
- China and Sweden already launched state-backed cryptocurrency
Cryptocurrency News Today – the governor of the Bank of England, Andrew Bailey said the national financial institution is still deliberating on whether it should make a CBDC (central bank digital currency). Bailey made the comments while speaking at a webinar event. He admits that a CBDC will become a reality in the future. Maybe in a few years. Although, he did not give a time frame for when the discussions over the matter will end.
The latest comments over the creation of a CBDC by the Bank of England is a part of the institution’s continuing public statements to reaffirm its support for a digital version of the pounds sterling. It appears there is wide support for the endeavor and it’s only a matter of time before a decision will be reached.
The Bank of England has Joined the Major Central Banks Studying Digital Assets
The Bank of England is part of the major central banks studying the development of digital currencies. According to Bailey:
“We are still contemplating the question of creating a Central Bank digital currency (CBDC). We will continue looking at it, as it will have huge implications on payments.”
Bailey cautions that the initiative will achieve major progress when the Covid-19 has been eradicated. Reacting to Bailey’s remarks about the BoE’s plans for a CBDC, Konstantin Anissimov, the executive director of Cex.io says such a move will have many positive effects on the country’s economy. According to Anissimov:
“In addition to creating stability through a diverse and resilient payments system, a CBDC could help build a more reliable cross-border payments model. This system will substitute the current one that the BoE describes as expensive, and slow.”
Complementing physical banknotes, a CBDC could cut down the share of privately issued funds in the economy.
China and Sweden Already Launched CBDC
Before the coronavirus outbreak (which has fueled a rise in the demand for cashless payments) several countries have been working on the development of a Central Bank Digital Currency. Some were in the consideration phase. A threat from the privately issued stablecoins including Facebook’s Libra token has seen central banks join the race to create CBDCs. Currently, China and Sweden have issued theirs and are leading the race.
Meanwhile, countries like the U.S (just like the UK) are currently in the decision phase. In the meantime, an effective cross-border payment model will be more important than ever for the UK when the Brexit transition ends. The Brexit transition is expected to end by January 1, next year, and also alter the UK’s payments landscape.