The Bank of England will take a closer look at the possibility of rolling out its own digital currency that will complement banknotes, according to Markets Insider.
- The BoE has yet to make a decision on a central bank digital currency but believes it should be carefully studied at the very least. It has committed to look into the risks, benefits, and practicalities.
- Deputy Governor Jon Cunliffe said the payment system would benefit as the CBDC would make it “more resilient, innovative, and competitive,” but flagged that this would lead to questions on the overall economy and financial system.
- The BoE will partner with the United Kingdom’s Treasury to look into issues. Any CBDC should be easily accessible, comply with privacy regulations, in line with money laundering regulations, and should not interfere with monetary policy.
- Should a CBDC be launched, it will be designed to co-exist with fiat currencies. Private sector alternatives will also be weighed.
Several countries are already exploring their own CBDC, such as China with the digital yuan. The United States Federal Reserve will report its thoughts in the coming weeks.