Bank of England announces working groups tasked with shaping a future cryptocurrency
by: Dynasty GI2021-10-07
Britain’s central bank, the Bank of England, has confirmed the make-up of two working groups set up to look into a potential central bank digital currency (CBDC).
The groups are formed by companies with links to the crypto space as well as neobanks that have been growing in the country, including PayPal, Monzo and Starling Bank. Traditional players such as Visa and Mastercard are also invoved.
One of the groups has been tasked with gathering ‘strategic input on policy considerations and functional requirements pertaining to CBDC’. The other group will focus on the tech side, to help the Bank ‘understand the technological challenges of designing, implementing and operating a CBDC’. The Bank of England is yet to make a firm commitment towards developing its own digital currency but earlier this year Sir John Cunliffe, a deputy governor at the BoE, said it was ‘probable’ that a British central bank digital currency would be created to promote the survival of ‘public money’, as the traditional arrangement is challenged by privately-issued currencies.
"“It is a matter of time before more central banks develop and issue their digital currencies or they will be left behind, posing challenges to their traditional monetary control role. Having said that, as privately-issued cryptocurrencies grow in importance, we see the world going full circle, as the Bank of England started life as a private bank to act as banker for the government”, highlighted Eduardo Carvalho, the founder and CEO of Dynasty Global Investments AG."
Sector analysts believe that central banks like the Bank of England see stablecoins as a particular threat given their pegging to fiat currencies or precious metals, which can encourage more widespread use by the public. At the moment, central banks across the world are considering the launch of their own CBDCs to ensure their currencies also have a digital presence.