Bank of England could make a major impact on cyber currencies
News on 2 Jan 2018
News on 2 Jan 2018
Several mainstream media outlets in the UK have reported over the past two days on the possibility that the long-established and internationally respected Bank of England could launch its own cyber currency as early as this (2018) year, an event likely to have a major impact on both the crypto-currency and banking sectors.
A Bank of England-issued digital currency would potentially allow British citizens to keep their money – in digital form – with the central bank itself, perhaps even dispensing with the need for a retail bank. Big-ticket transactions, such as buying a house, could happen in nanoseconds.
The reports claim that the bank has for the past three years been researching the concept of linking sterling with a UK government-backed crypto-currency, and last year the bank commissioned Dr. George Danezis of the University College London to devise a crypto-currency with state-assumed backing.
The reports also point to testimony by the Bank of England Governor, Mark Carney, who told a Treasury Select Committee before Christmas that he had held talks with other central banks about launching a digital currency.
Carney described Bank of England’s study of Bitcoin integration since 2015 as “pretty active but we’re also disciplined. If we’re going to apply something to the core of the system, it’s going to need to meet five sigma quality rating.”
Carney confirmed: “I have participated in discussions with the major central banks on this issue,” revealing that over the summer last year the Bank had used blockchain technology as a test to see if it could be used as settlements between central banks. These were apparently successful.
“The underlying technology is actually of a fair bit of interest. We are working with it at the Bank of England,” Carney reportedly explained to the Treasury Select Committee.
Reports from cyber-currency dedicated media outlets claim that a Bank of England backed crypto-currency could have important implications for the online gambling industry, where as much as 40 percent of transactions in “grey” or “restrictive” markets are currently conducted via cyber-currencies like Bitcoin.
The reports additionally observe that the Bank of England will not be the first national financial institution to enter the field, pointing to moves by Venezuela with its Petro currency and reported research into possibilities by Russia.
