Ben Broadbent, the deputy governor of the Bank of England, has stressed the importance of launching a CBDC. According to Bloomberg’s report on Feb 27, Broadbent pointed out the benefits a CBDC could bring to the broader financial ecosystem, such as facilitating smooth payments.
The Bank of England is reviewing regulations for payment technology systems and exploring the potential of a CBDC. The British Treasury and regulator have begun a formal consultation to pave the way for introducing a CBDC alongside fiat currency.
In 2021, as the finance minister, British Prime Minister Rishi Sunak urged the Bank of England to investigate CBDC. In Oct of last year, Britain’s financial services minister Andrew Griffith noted that the region needed help dealing with the issue of CBDC. This was because other regulatory banking institutions worldwide were advancing digital currency research.
CBDCs Are Essential In Modernizing Finance
The Bank of International Settlements (BIS) has emphasized the significance of CBDCs in modernizing finance. Agustín Carstens, the head of BIS, has stated that cryptocurrencies are not reliable money. CBDCs are seen by many as a way to diminish the sway of private digital currencies, such as Bitcoin (BTC). Proponents of CBDCs widely hold this viewpoint.
Related Reading |NFT Marketplace SuperRare Announces Layoffs Amid Industry Downturn
However, BoE deputy governor Sir Jon Cunliffe had previously warned that the growth of cryptocurrencies could threaten the financial system. The challenge lies in balancing innovation and ensuring the financial system’s stability.
The Bank of England’s focus on exploring the feasibility of CBDC highlights the growing importance of digital currencies globally. It’s crucial to assess the potential risks and challenges of implementing CBDC, despite their potential advantages. A measured and cautious approach is necessary to ensure that CBDC can modernize finance while maintaining the stability of the financial system.
The author’s views are for reference only and shall not constitute investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing
Comments (No)