As part of a global group of central banks that have come together to examine the possible hazards of depending on electronic money, the Bank of England is considering adopting a bitcoin-style digital currency.
England’s Bank officials are to meet with Sveriges Riksbank, the Bank of Japan, Swiss National Bank, European Central Bank(ECB). Also, Bank for International Settlements (BIS), Bank of Canada to determine the potential for a central bank digital currency (CBDC).
Alongside Benoît Cœuré, a former ECB board member and head of the BIS innovation hub, Sir Jon Cunliffe, Deputy Governor of BoE will co-chair the group.
Also, it will work closely with other global groups and forums, such as the committee on payments and market infrastructures. Which is also chaired by Cunliffe and the Financial Stability Board.
Cryptocurrency will aid cross-border transactions
One of the importance of digital currency is that it will aid cross-border transactions. It will also help to better payment systems.
The new working group, according to the BoE would “look at Central Bank Digital Currency use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies”.
Banks are realizing the need to embrace cryptocurrency
Central Bank of Sweden, the Riksbank, has also been examining the idea of its own digital currency. Mainly, as a result of the high decline in the use of cash in Sweden.
The Riksbank said it would sign a deal with the consultancy firm Accenture to create a pilot platform for a digital currency, known as the “e-krona”.
The European Central Bank has also been investigating the likely benefits of CBDC since last year.
Fran Boait, executive director of Positive Money, said “policymakers have been slow over the future of our money system being determined by a small number of banks, payment companies and now tech giants.
“Cryptocurrency would ensure a safe public banking option for the people. It would also prevent our monetary system from being completely surrendered to unaccountable private interests.”
Bank of England endorses crypto
The group will also partner with various financial institutions and forums. Notably, the Financial Stability Board and the Committee on Payments and Market Infrastructures, the press release noted.
However, it is quite unlikely that the UK will issue anything similar to traditional digital currencies given the fact that previously HM Revenue and Customs registred a public contract for a $130,000 cost tool to track cryptocurrencies like bitcoin (EXANTE: Bitcoin), ethereum (ETH) and Monero (XMR).