According to reports from Bloomberg, the bank of England (BOE) is contemplating creating a government-backed digital currency. This was made known by Andrew Bailey, Governor of the Bank of England, in a webinar event, he told students that it was being reviewed and the Central bank is still trying to weigh their options.
It looks like the BOE is still in its early stages with this decision and has not gone very far with it, so it is not clear whether the Central bank has begun any serious preparations for the creation of this digital currency.
The idea is still in its first phase but if it proves increasingly valuable to the BOE, we can expect to hear of testing and regulatory frameworks being put in place, hopefully before the year comes to an end.
“We are looking at the question of, should we create a Bank of England digital currency, we’ll go on looking at it, as it does have huge implications on the nature of payments and society.” – Governor Andrew Bailey.
There’s hope for digital currencies to thrive in England
In a follow-up statement, Governor Bailey assured the students that the digital currency could possibly come to fruition in a few years’ time. As explained previously, this is just the consideration stage, and for the national currency to come to a realization, it is crucial that the inherent qualities of digital currencies do not clash or obstruct most of the already implemented financial laws in the country.
“I think in a few years’ time, we will be heading toward some sort of digital currency.” – Governor Bailey.
England’s Digital currency may not be anything like Bitcoin
“Some sort of digital currencies,” could also imply that the underlying structure of this digital currency may not be the same as other regular digital currencies like Bitcoin. Circulating supply, the Blockchain of choice, and many other fundamental structures may be customized to suit the country’s overall economy.
Governor Bailey is also very aware of how important cryptocurrencies are and how important their adoption could be for the country. But with the global pandemic throwing off day to day activities, the governor is hopeful that by the time assessments become more serious, the pandemic would have been subdued.
“The digital currency issue will be a very big issue, I hope it is, because that means Covid will be behind us.” – Bailey.
Is the Bank of England trying to rival Libra?
It is very possible that the BOE is trying to rival the other digital currencies, specifically Libra. Last year, the bank made it clear that the global dominance of Facebook already implies that Libra will be “systematically important,” if implemented. Regulating Libra as the BOE asserted, also means other firms in the Libra ecosystem will be accepted.
The Bank of England concluded by saying that Libra will face tough oversight and so far this has been the case since the new Governor’s arrival. At the end of the day, one of these currencies might have to give way for the other. But former events show that the country’s own digital currency has a better chance of surviving in England.