The Bank of England, or BoE, has been seriously considering the issuance of a central bank digital currency, or CBDC. It’s taken its various benefits and drawbacks into serious consideration, trying to determine if it would make one denominated to the pounds sterling. The British central bank had officially recognized that a form of the digital pound sterling has the potential to destabilize the banking system in its current state.
Feasibility Study Of Digital Pound Sterling
However, the latest innovations in FinTech could be leveraged within a digital currency to create smoother and quicker transactions for the country’s consumers. This is something that would greatly benefit everyone.
Within the report, all 57 pages of it, the Bank had released earlier, it examines feasible ways to introduce CBDCs into the existing financial market. There, it would serve as a possible store of value, as well as be used during everyday transactions.
The Gears Of Progress Turn Slow
The report itself has aptly titled “Central Bank Digital Currency March 2020: Opportunities, Challenges, and Design.” It primarily follows government officials and their discussions regarding a CBDC as they explore the idea of shifting to a digital economy.
It’s an irrefutable fact that cryptocurrencies as a whole have become more mainstream, with things like stablecoins and CBDCs the following suit. As this goes on, slow as it can be at times, the fiat money that central banks issue is, equally as slowly, losing its irrefutable position within the financial sector. One need only look at Libra and the sheer amount of scrutiny it had caused, to see that banks are starting to realize they’re not as irrefutable as they once were.
Implementing Innovations Of Today
Blockchain-based platforms offer a secure, quick, and cheap way to do transactions, and have become increasingly popular due to this. In order for the BoE to gain access to this new market, it would first need to develop and issue a digital currency on a blockchain network. A large number of countries have recently been forced to seriously consider the implementation of its respective CBDC after the Libra stablecoin made its announcement. It served as a testament that the private sector was ahead, and the governments needed to play catch-up in this field in particular.
Should the BoE issue out a CBDC of its own, it would stand as a significant innovation within the finance sector. Transactions done through this blockchain network would be cheaper, quicker, easier, and overall more secure to send due to the inherent qualities of a blockchain network.