The bank is also considering issuing digital currencies through private initiatives.
In his opinion, Bitcoin does not meet the requirements to be considered money.
After the publication of a document in March, specialists from the Bank of England gave a lecture in a private webinar on the opportunities and challenges of issuing a national digital currency.
Bank of England officials have reservations about Bitcoin’s monetary nature and are firmly convinced that a national digital currency should not be anonymous, commented on April 7, based on the preliminary document on the subject.
The panel consisted of Tom Mutton (director of Fintech), Ben Dyson (director of National Digital Currencies and Cryptoactive) and Manisha Patel (senior analyst of the cryptocurrency team). Dyson explained that national digital currencies must be designed based on compliance with data protection regulations and that users must know what data they share with whom and how often. In addition, national currencies should not be completely anonymous.
In addition to this comment, he believes Bitcoin and other cryptocurrencies do not have the features necessary to be considered money, and praises private payment system projects or spending certain crypto assets that he believes are better than Money might work. Together with the also mentioned idea that this digital national currency system can be used by private companies for the realization, they also affirm that this task should not be left entirely to them due to errors in the existing payment systems that exist in the existing payment systems. This requires that Public sector oversight to understand and protect customer needs.
“We have been thinking about what the payment systems will look like in the future and what they will look like, so we have great motivation to do all of this now,” he said.
Regarding the observation of the monetary nature of Bitcoin and other cryptocurrencies in turn, Tom Mutton reiterated that they do not meet the necessary requirements to function as money, and that he has a greater future interest in stable coins or coins without it however, would have to adhere to the standards that the bank prescribes, what is money or not, “which is generally electronic money sent by reliable institutions or banknotes and cash,” he says.
They also don’t think cryptocurrencies are a threat to the UK financial system. but yes for the investors involved in them, a position that the Fiscal Policy Committee has held since 2018 when it issued a related document. Since then, they appear to have been consistent in this stance, as both their past and current management have spoken out against cryptocurrencies, as we reported on CryptoNews.
It should be clarified that this discussion of issuing a national currency mainly related to its implementation in the retail markets, while wholesale, industrial or supply chain markets can also benefit, although they pose different challenges and are not currently a priority.
They are making it clear that the Bank of England is treating this sector with other technologies or methods, such as the Real Time Gross Settlement System (RTGS), in which banking is done in real time to the bank, in a scenario of international trade.
The Central Bank of England’s vision is that the issuance and implementation of private digital currencies should also be examined for the role played, for example, by companies like Facebook that are preparing to launch Libra, without the approval of the world’s central banks.
In the webinar, they also affirmed that although they are not planning to issue a cryptocurrency, they may be interested in using blockchain or some distributed accounting technology (DLT) tools such as smart contracts. In a survey of webinar participants, which asked which element of the DLT would have the greatest benefit for this national digital currency, The programmability option has won (33%) versus other options such as decentralization (28%), cryptography (15%) and data communication (16%).
However, it can be saved that they see the private sector as a fundamental actor in the development of this national digital currency and are even open to the issue of private currencies after regulation, which could facilitate the relative decentralization of the economy.
Replies to comments in this webcast will be received by June 12 this year.