Is a Bank of England Cryptocurrency On the Way?

Is a Bank of England Cryptocurrency On the Way?

By Benson Toti - min read
Updated 21 March 2023

 Rumours of a Bank of England cryptocurrency have increased. This is due to the news that officials will be meeting up with their counterparts from other central banks. They all want to see what digital currencies could offer and what the possible dangers are.

Could a Bank of England cryptocurrency be issued soon?
Image courtesy of Pxhere

The Situation So Far

It has been revealed that the Bank of England cryptocurrency researchers will meet with colleagues from other banks. These include the Bank of Japan, the Bank of Canada, the Swiss National Bank and the Sveriges Riksbank from Sweden. The Bank for International Settlements will also be involved in the meetings.

Sir Jon Cunliffe is the deputy governor of the BoE. He is set to co-chair the group with Benoît Cœuré, who is head of the BIS innovation hub.

This move comes following concerns in several governments about the launch of Facebook Libra. Central banks and regulators around the planet have spoken about the need for new regulations to cover this and other coins. The BoE was one of the first banks to mention that legislation is needed for the digital world.

This call for tough new laws is regarded as being one of the reasons why Libra has lost support among its backers. At the time of writing, Vodafone has recently joined the likes of Visa, EBay and MasterCard in leaving the project before it gets off the ground. PayPal also dropped out a while ago.

What Will They Do?

Reports suggest that the working group will cover a variety of issues. These include the different use cases for a central bank digital currency. They will also look at matters such as “economic, functional and technical design choices”.

In addition, they will assess cross-border inoperability and the “sharing of knowledge on emerging technologies”. The members will also join forces with other worldwide groups that are working on this subject. This includes the Financial Stability Board and the Committee on Payments and Market Infrastructures.

It isn’t clear when a Bank of England cryptocurrency could be introduced. However, the Swedish central bank has already announced plans of this type. They have said that they will now be working with the Accenture consultancy to design a platform that lets them pilot an e-krona coin.

With the use of cash declining in various parts of Europe, it seems like a matter of time before some of these central banks bring out their new digital currencies. This project should go a long way towards showing them how it can best be done. They will also be aware of the moves made in China over a possible central bank currency.