Bank of England to hold Meeting on Central Bank Digital Currency

Piyasi Mitra
Piyasi Mitra is a journalist, features writer and copy editor who has worked with The Times of India and the ABP Group, and is currently exploring content creation in the digital space.
  • Bank of England and other central banks will consider application and designs for a CBDC on August 19
  • Hosted by Official Monetary and Financial Institutions Forum (OMFIF), the meeting will also be attended by the Swiss National Bank, Magya Nemzeti Bank, ING Group and blockchain platform Cypherium
  • The meeting’s agenda will be to strategize the ways in which Blockchain technology can benefit CBDC operations through the use of smart contracts

The Bank of England (BoE) will take part in a key roundtable on August 19 to discuss the applications, design, and benefits of a Central Bank Digital Currency (CBDCs) and its possible infrastructural designs. 

Hosted by the Official Monetary and Financial Institutions Forum (OMFIF), the meeting will also be graced by Simon Scorer, BoE’s senior fintech specialist, alongside officials from the Swiss National Bank, ING Nederland and the Hungarian National Bank (Magyar Nemzeti Bank). Sky Guo, CEO of enterprise-focused Blockchain platform Cypherium, will also be a part of the meeting.

Bank of England recognizes cryptocurrency benefits

The meeting’s agenda will be to strategize the ways in which Blockchain technology can benefit CBDC operations through the use of smart contracts and other Blockchain networks for inter as well as intranational operations. The central bank delegates — BoE’s Simon Scorer, Magyar Nemzeti Bank’s chief digital officer Anko Szombati, ING’s blockchain team IT specialist Cees Van Wijk and Swiss National Bank governing board member Thomas Moser — will be presenting findings from their respective bank’s internal CBDC research.

National currency, digital version

As CBDC remains in an early stage of conceptualisation, Guo opines this is the time to dissect the advantages and disadvantages of infrastructural systems.

Pressure from the private sector, including likes of Facebook, has also prompted an estimated 80% of the world’s central banks to look seriously into CBDC, notes OMIFF.  With a view to keep abreast of the latest developments, the meeting aims to explore and evaluate the various infrastructural possibilities to support a national digital currency.

In March 2020, the BoE had issued an elaborate paper on CBDCs which analysed the evolving payment ecosystem and highlighted the potential role for CBDCs to support the bank’s task of achieving better financial operations.

Advantages of CBDC

Local reports suggest that Zurab Ashvil, CEO and founder of L3COS, which pitched a Blockchain operating system to the Bank of England, feels establishing traceability would make “fraud, money laundering or another black-market financing impossible”. There are also benefits for cross-border payments, as proven by the launch of JPM Coin last year. This digital currency owned by JP Morgan was designed to facilitate instantaneous transfers.

Shortly before he assumed charge as the governor of BoE this year, Andrew Bailey had expressed his scepticism about private, decentralised cryptocurrencies such as Bitcoin. However, his idea of cryptocurrency too seems to have changed with time like that of many others. In July, he also opined that  BoE will continue to look seriously at the question of whether or not to issue a digital currency, as its impact on modes of payment in the society today is undeniable.

An earlier report by the Bank for International Settlements too had noted that COVID-19 had amplified the need for CBDCs.

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