Bank of England Considering a Central Bank Digital Currency, Governor Says
Bank of England. (Aslysun/Shutterstock)
The U.K.’s central bank is discussing the possibility of launching a digital currency, according to its chief.
- Speaking during an online event, Bank of England governor Andrew Bailey told a group of U.K. students on Monday his institution was having talks over the plan, as reported by Bloomberg Tuesday.
- Bailey said ongoing investigations would look at a central bank digital currency (CBDC) which would have implications across “payments and society.”
- Calling it a “very big issue,” he anticipated that the CBDC could be a real possibility in several years, once coronavirus has passed.
- Bailey’s comments come at a time when more and more central banks globally are working at different levels on the idea of implementing a CBDC, either as a national digital currency for retail or for wholesale clearing and settlement between banks.
- Sweden’s Riksbank, the world’s oldest central bank, recently looked into the viability of CBDCs and arrived at mixed results for the purpose of central banking, citing the substantial change and cost involved in the shift to digital.
- The Federal Reserve of Philidelphia also determined that CBDCs might one day replace the role of commercial banks, but with the added risk of potentially harming money markets.
- China, most notably, has already largely developed its digital yuan, which is in trials ahead of a likely live launch.
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