Bank of England sees no need for digital pound
2023.01.17 03:15
Bank of England sees no need for digital pound
By Tiffany Smith
Budrigannews.com – Shortly after finance ministers from countries in the eurozone supported additional work on a digital euro, the governor of the Bank of England (BoE), Andrew Bailey, expressed skepticism regarding the necessity of a digital pound.
Since there is already a “wholesale central bank money settlement system with a major upgrade,” the BoE governor recently questioned the necessity of a wholesale central bank digital currency (CBDC).
In addition, Bailey stated that cash would not be eliminated from retail transactions. The governor of the BoE does not think that retail payments need to change right now. He elaborated:
Before we get carried away by the technology and the concept, “we have to be very clear what problem we are trying to solve here.”
Bailey’s remarks come in response to recent comments made by a former BoE advisor on the costs and dangers of creating a CBDC and recent CBDC developments in the eurozone.
A statement supporting continued work on a potential digital euro, which is currently being studied by Europe’s central bank, was published on January 16 by finance ministers from the countries that make up the eurozone. The Eurogroup acknowledged that additional political debate is required regarding the implementation of a CBDC. Additionally, the group emphasized the issues it was observing, such as privacy, financial stability, and environmental effects.
In an opinion piece published in the Financial Times on the same day, former BoE advisor Tony Yates argued that the risks and costs of developing CBDCs are insignificant. In addition, Yates referred to the CBDCs as “suspect” and questioned their motivations.
In the meantime, Iran and Russia are researching the development of a brand-new stablecoin that is backed by gold. The Russian news agency Vedomosti reported that Iran and Russia are working together to create a so-called “token of the Persian Gulf region” to facilitate cross-border transactions.
