Bank Of England Reopens The Possibility Of Bank-Run Cryptocurrency
The Bank of England has not closed the door on a central bank-issued cryptocurrency, despite announcing such a decision earlier this year.
Mark Carney, the governor of the Bank of England, speaking on a panel in Stockholm on the future of central banks, said he would consider a digital currency issued by the central bank but that it is not a pressing concern, according to Bloomberg. He reaffirmed previous statements that cryptocurrencies are not acting as money at the present time.
Impact On Financial System Stokes Concern
Earlier this year, the bank said it will not launch a bank issued cryptocurrency on account of the possible ramifications on the financial system. The bank, which began exploring cryptocurrency in 2015, eventually decided that consumers would select its cryptocurrency and close their commercial bank accounts, wreaking havoc on the financial system.
The bank also expressed concern that it would lose the ability to use its interest rate policy to maintain financial stability if it introduced a bank controlled cryptocurrency.
Bank of England Pursues Blockchain Technology
Carney nonetheless also noted at the time that there are advantages to deploying blockchain technology for central banking. He said it brings financial stability and saves a lot of computational energy output.
In April, the BoE released a proof on concept analyzing ways to allow customers to share information in a secure network. The bank enlisted the services of Chain, a blockchain services provider, to develop a solution.
The bank said maintaining data networkwide and improving user privacy was in a preliminary stage, but the possibility of accomplishing these goals still exists.
In 2016, the bank began teaming with fintech companies and began its “Fintech Accelerator” program. In the past, it has worked with Ripple, BitSight, PwC, Enforcd and MindBridge Analytics Inc.
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