Bank Of England Chief Sees Bank-Backed Digital Currency On Horizon

BOE Chief Foresees Bank-Backed Digital Currency

The Bank of England (BoE) continues to send bullish signals about the potential for bank-backed digital currency, but anyone hoping for a quick launch is likely to be disappointed.

“We are looking at the question of, should we create a Bank of England digital currency,” Andrew Bailey, governor of The Bank of England, told students on a Monday (July 13) webinar, according to Bloomberg. “We’ll go on looking at it, as it does have huge implications on the nature of payments and society.”

Bailey’s comments come roughly six months after the BoE said it would help lead a working group of some of the world’s top central banks to explore the various issues involved with potentially issuing central bank digital currencies (CBDCs).

In addition to the Bank of England, other central banks taking part in the study group include the Bank of Canada, Bank of Japan, European Central Bank (ECB), Sveriges Riksbank and Swiss National Bank, as well as the Bank for International Settlements (BIS).

The group of bankers noted at the time that the study would examine the “economic, functional and technical design choices, including cross-border interoperability, and the sharing of knowledge on emerging technologies. It will closely coordinate with the relevant institutions and forums — in particular, the Financial Stability Board and the Committee on Payments and Market Infrastructures.”

Bailey’s comments on Monday indicate that the study of central bank digital currencies continues to move forward, despite the disruptions caused by the coronavirus crisis and the worldwide economic slump it has triggered.

However, Bailey also cautioned that CBDCs will likely take years, not months, to develop, with the timeline inevitably lengthened as the BoE and other central banks are forced to devote their energies to dealing with the economic crisis spawned by COVID-19.

“I think in a few years’ time, we will be heading toward some sort of digital currency,” BoE’s Bailey told the students.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.