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The Bank of England sees CBDCs as a revolution for the future of money

In an event broadcast live on Wednesday, Bank of England Governor Andrew Bailey and Deputy Governor for Financial Stability Sir Jon Cunliffe responded to questions from lawmakers on the Economic Affairs Committee. When asked about the growth of innovation around digital currencies in the country, Sir Cunliffe made the following comment:

“It is quite difficult to predict how innovators will take money and use it in the future. But we are beginning to see how programmable money is used in the world of cryptocurrencies. And I hope we will see a similar revolution in money functionality driven by the technology”.

Sir Jon Cunliffe speaking of CBDC | Source: Parliamentlive.tv

The Bank of England is currently studying options to implement a CBDC digital pound for retail payments. A task force behind the CBDC is also investigating the use of a digital pound to pay payroll, pensions, etc.

By supporting the initiative, Sir Cunliffe cites the rapid decline in cash use in the UK in recent years, which was greatly accelerated with the arrival of the COVID-19 pandemic, which discouraged physical contact in transactions. It is estimated that 30% of transactions in the country are now carried out through electronic commerce.

When asked about the possible lawsuit for a digital pound CBDC, Sir Cunliffe said:

“We have modeled a very cautious assumption, which is that basically 20% of deposits [transaccionales de hogares y empresas] based on the banking system could exit the banking system and become central bank digital money. “

Nonetheless, Sir Cunliffe admitted that the current cryptocurrency situation could threaten the country’s financial stability. The market capitalization of cryptocurrencies has skyrocketed to $ 2.6 trillion in a very short time, with an estimated 95% of digital assets being unbanked and 5% consisting of stablecoins. On the opposite side of the Atlantic, the United States takes a less positive view of CBDCs, stating that regulated stablecoins designed by the private sector make them redundant.

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HELEN HERNANDEZ

Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Helen@oicanadian.com Phone : +1 281-333-2229

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