Bank of England could issue own digital currency
Like its counterparts in the US, the Bank of England is pondering the implications of issuing its own digital currency.
“In principle,” the Bank continues “it might also be made available to non-financial firms and individuals generally, as banknotes are today.”
The costs and benefits for monetary and financial stability would likely vary in the different cases, says the Bank, being more pronounced the more widely a digital currency is held.
“For example, making central bank money widely available could have an impact on deposits held at commercial banks and a knock-on effect on the banking system,” states the paper. “Another relevant issue is the impact that offering a new method of settlement in central bank money would have on existing payment systems.”
The UK Government is keen to promote the benefit of new technologies as a means to inject more competition into the banking system. The Bank’s open-minded approach to the digital currency debate got the seal of approval from UK Chancellor George Osborne, who tweeted:
Source: Finextra – Bank of England could issue own digital currency