Bank of England: No Plans for Central Bank Cryptocurrency

79133633 - british coins stack on black, pound sterling



British media reported in late December on the Bank of England’s possible plans to introduce a reserve bank digital currency linked to sterling. According to those reports, the BOE had created a research unit to investigate the possibility of launching the cryptocurrency as early as this year.

As Bloomberg notes today, however, speculation about the Bank’s plans may have been somewhat exaggerated. Though the central bank continues to research digital currency technology, the reserve bank has confirmed that there are no current plans to create a BOE digital currency.

BOE Governor Mark Carney reportedly told British lawmakers in December that any cryptocurrency issued by the central bank could pose unique challenges that might disrupt the nation’s commercial banking system and undermine financial stability.

Carney suggested that Britons might move their accounts from other banks to the BOE during a crisis. That could leave those banks without the deposits needed for sustained lending, which could effectively freeze credit and force people to look to the BOE for assistance – placing the central bank in an awkward position:

“Of the many talents of the Bank of England, credit allocation for the entire economy would not be a good idea.”

The BOE’s website clearly spells out the Bank’s current position on the topic:

“At the moment, we provide electronic accounts to banks and key financial institutions, but the public can only hold central bank money in physical form – as banknotes. If a central bank were to issue a digital currency everyone, including businesses, households and financial institutions other than banks, could store value and make payments in electronic central bank money in addition to being able to pay with cash.


While this may seem like a small change, it could have wide-ranging implications for monetary policy and financial stability.

We do not currently plan to issue a central bank-issued digital currency. However, we are undertaking research to better understand the implications of a central bank, like the Bank of England, issuing a digital currency.”

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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