Bank of England Governor Not Opposed to Creating Own Digital Currency

Bank of England Governor not Opposed to Creating Own Digital Currency

The governor of the Bank of England, Mark Carney has indicated that he is not opposed to the idea of creating a central bank issued digital currency, whilst speaking at the Riksbank of Sweden on Friday.

Carney was speaking on a panel as part of the Riksbank’s 350th birthday ceremony when he made the remarks.

Many will see this as a distinct change in tune of Carney, who previously been extremely critical of cryptocurrencies and bitcoin in particular.

“It [cryptocurrency] has pretty much failed thus far on… the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.” Carney said during his February speech at Regent’s University in London.

The Bank of England issued a working paper earlier this month, which analyzed the risks in different scenarios of releasing a central bank issued digital currency. The report found that that there was likely no risk posed by such a project, to current credit or liquidity provisions in the British economy. This is in contrast to reports at the beginning of the year, that the Bank had dropped the idea of issuing its own digital currency for fear that it would lead to capital drain out of the traditional economy.

At any rate, Carney stressed that any issuance of a digital currency by the Bank of England would not be happening any time soon, saying that cryptocurrencies are currently not classed as money.

Carney stressed that the Bank had been working hard to shore up the British economy in the wake of the Brexit vote and that it was now much better insulated against potential shocks which might come from leaving the EU. Investigations into state-run cryptocurrencies could be part of an exploration into creative solutions to protect the economy from future crises.

The Bank of England is not the first central bank to entertain the idea of launching its own digital currency; the crypto-ruble and crypto-krona are reportedly under development in Russia and Sweden respectively. The central bank of Norway released a white paper earlier this month in which they state they are considering releasing a digital currency to “ensure confidence in money and the monetary system.”. The Baltic state of Estonia also made headlines in December 2017 as it announced it would launch ‘estcoin’, a state-created digital currency which would be aimed at the country’s 27,000+ e-residents.

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