Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

What Has the BOE Actually Said About Starting a Cryptocurrency?

Published 2018-01-05, 09:47 a/m
© Bloomberg. A transparent window featuring a portrait of Queen Elizabeth II sits next to a finely detailed metallic image of Winchester Cathedral and a colored quill which changes from orange to purple when tilted on the new U.K. 10-pound banknote in this arranged photograph taken at the Bank of England in the City of London, U.K., on Monday, Sept. 11, 2017. The new bills, which replace the image of naturalist Charles Darwin with that of early-19th century novelist Jane Austen, will be issued on Sept. 14 and will be the first to include a tactile feature to help the visually impaired.

(Bloomberg) -- With the amount of money pouring into bitcoin and other crytocurrencies, the Bank of England has drawn attention with reports that it is -- or isn’t -- planning to launch its own version as soon as this year. The bank itself says it isn’t, and it may not ever have planned to.

According to the BOE website, where it outlines the research a team is doing on digital currencies, the view is set out pretty clearly. (The page was last updated three days ago.)

Addressing lawmakers in London last month, Governor Mark Carney outlined why, explaining the risks of a central bank issuing its own digital currency that would allow everyone across the country to have an account at the BOE. That, he said, creates a situation whereby in times of trouble you could have an “instantaneous run” on commercial banks as Britons switch to their BOE account for safety, with financial-stability repercussions.

He also questioned how the BOE would cope with the huge amount of deposits that would result. “Of the many talents of the Bank of England,” he said, “credit allocation for the entire economy would not be a good idea.”

Read more: What the World’s Central Banks Are Saying About Cryptocurrencies

Carney’s comments chime with those of the BOE’s chief cashier, Victoria Cleland, in an article published in July.

“A CBDC (Central Bank-issued Digital Currency) will create some fascinating opportunities but also poses many significant and complex questions, which must be answered before the bank can consider making a fundamental change to the nature of central bank money.”

That’s not to say the Old Lady of Threadneedle Street is closing her doors to technology. The governor said last month that the systems underlying cryptocurrencies are an “active area of interest” and work undertaken by the BOE’s FinTech accelerator shows the potential value of distributed ledger technology on a systemic, rather than a retail level.

While a BOE spokeswoman declined to comment on the latest speculation on digital currencies, she pointed Bloomberg to the website and speech by Cleland.

The overall message? Don’t expect BOEcoin anytime soon.

© Bloomberg. A transparent window featuring a portrait of Queen Elizabeth II sits next to a finely detailed metallic image of Winchester Cathedral and a colored quill which changes from orange to purple when tilted on the new U.K. 10-pound banknote in this arranged photograph taken at the Bank of England in the City of London, U.K., on Monday, Sept. 11, 2017. The new bills, which replace the image of naturalist Charles Darwin with that of early-19th century novelist Jane Austen, will be issued on Sept. 14 and will be the first to include a tactile feature to help the visually impaired.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.