Komal Joshi · Oct 21, 2020 . 6min read
BOE Debates whether to Create Digital Currency -CBDC
Bailey says the BOE deciding to creates its own central bank digital currency thus have huge implications.
By Victor Ugochukwu · Jul 14, 2020 . 6min read
The Bank of England – BOE is debating whether it create its central bank backed digital currency (CBDC), governor Andrew Bailey hinted.
Bloomberg reports in a recent webinar with students held by the governor, Bailey discusses that BOE is weighing its options. He said
“We are looking at the question of, should we create a Bank of England digital currency. “
Bailey says the BOE deciding to creates its own central bank digital currency thus have huge implications. This is important especially if you view it from the lens of payments and the impacts it has on society.
“We’ll go on looking at it, as it does have huge implications on the nature of payments and society”Andrew Bailey
BOE and a team of central bankers recently met to debate CBDC and risks like Libra and other Big Tech’s venture into payments
Reacting to Facebook’s Libra ambition concerns sparked off among them, a team of Central bankers across the world teamed up to weigh in on the option of developing their own digital currencies (CBDCs). According to the report, their decision is based on the new challenge Big Techs’ venture into payments and remittances.
Assessing CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies was the responsibility of the team.
Africans and Latino America are already huge users of cryptocurrencies as compared to the PayPal’s limiting policies
Cryptocurrencies have already taken a big portion of the turf formerly exclusively controlled by banks and other regulated financial institutions. Many in the developing countries in Africa and Latino Americas constantly transact using cryptocurrencies. Particularly in the areas of payments and cross border remittances. This is especially important when viewed against PayPal and others limiting policies to developing nations.
Governments know Libra poses huge threats to them and as such may never see the light of day
Upon critical analysis, Libra would have posed a great risk to banks in these areas because of its ease of use as typical of most technology companies with superior user experience capabilities. Facebook which birthed the Libra ambition also boasts of more than 2 billion users across its several platforms like Facebook, Messenger, WhatsApp and Instagram.
Government through the United States Congress wasted no time in ordering Facebook to suspend its Libra plans which will end up never seeing the light of day as some experts say.
Bailey acknowledges digital currency is a big issue. In his acknowledgement, he said:
“The digital currency issue will be a very big issue,” Bailey said. “I hope it is, because that means Covid will be behind us.”Andrew Bailey