Bank of England Joins Global Peers Exploring a Digital Currency
April 19, 2021
Britain’s Treasury and the Bank of England are weighing the potential creation of a central bank digital currency, joining authorities from China to Sweden exploring the next big step in the future of money.
The government and central bank on Monday announced the creation of a task force to coordinate on the possibility of BOE-issued digital money for use by households and businesses. They will engage in discussions with stakeholders on the risks and benefits before making a decision.
If approved, the digital currency would “exist alongside cash and bank deposits, rather than replacing them,” according to the statement.
With modern technologies and the coronavirus accelerating the push toward cashless transactions, and crypto currencies such as Bitcoin gaining traction, central banks are taking action to make sure they don’t fall behind.
In 2020, the Bahamas launched the Sand Dollar, making it among the world’s first sovereign-backed digital currencies. The European Central Bank and Sweden’s Riksbank have said they could follow suit around the middle of the decade.
China is also considering a digital yuan, but the Federal Reserve has previously said it was not something the U.S. would rush into.
The U.K. task force will be jointly chaired by BOE Deputy Governor Jon Cunliffe and the Treasury’s Director General of Financial Services, Katharine Braddick. A new CBDC division will be set up at the central bank.