Bank of England deputy governor Sir John Cunliffe will reportedly co-chair a central bank working group created to explore the potential benefits and risks of central bank digital currencies, The Guardian reports. The group’s efforts are the latest in a series of responses to Facebook’s proposed Libra cryptocurrency project from officials across the globe.
Bank officials will meet with the Bank of Japan, the European Central Bank (ECB), the Sveriges Riksbank, the Bank of Canada, the Swiss National Bank and the Bank for International Settlements (BIS) to pool research and experiences of the potential for a central bank digital currency (CBDC).
As The Guardian notes, regulators and policymakers around the world have expressed resistance to Libra, with some officials suggesting that the currency could undermine the existing financial and monetary systems. In response, a number of governments and central banks have been examining potential CBDCs as a way to counter Libra and address declining consumer demand for cash.
Britain’s central bank suggested that the working group will examine digital currency case uses, various technical and functional design possibilities, and options for improving their emerging tech collaboration and sharing of data.
Positive Money executive director Fran Boait told The Guardian that the central banks are only now waking up to the threat private companies could pose to the world’s monetary system:
“They have been asleep at the wheel over the future of our money system being determined by a small number of banks, payment companies and now tech giants.
The rapid decline of cash and threat of private digital currencies like Facebook’s libra have served as a much-needed wake-up call, but central bankers have a lot of catching up to do.”