BoE explores implications of blockchain and central bank-issued digital currency
The Bank of England has embarked on a multi-year research programme to explore the implications of a central bank issued digital currency (CBDC).
This has been revealed by Victoria Cleland, Chief Cashier at BoE, during the 2nd International Workshop P2P Financial Systems 2016. Cleland mainly spoke on the latest wave of fintech activity with particular focus on distributed ledger technologies (DLT) and CBDC.
“We are undertaking more fundamental long-term research on the wide range of questions posed by the potential of a central bank-issued digital currency (CBDC). Whether a CBDC would be feasible and whether it would benefit the economy and the financial sector, over the medium term are big issues, and the answers remain far from clear. We have embarked on a multi-year research programme so that any future decision is informed with a full understanding of the implications”, Cleland said.
She noted that over 24 countries are currently investing in DLT with $1.4bn in investments over the past three years. In addition, over 90 central banks are engaged in DLT discussions worldwide and more than 90 corporations have joined blockchain consortia. 80% of banks are predicted to initiate DLT projects by 2017.
Cleland further emphasized on the need to understand technology options. Cleland noted that DLT is still in its infancy and that there are several questions to be explored, such as–
“The Bank has already undertaken a proof of concept using this technology and we are looking for new opportunities through our FinTech accelerator”, Cleland added.