New technology could help open up “new frontiers” in how payments and money are used, a Bank of England boss has told MPs.
Deputy Governor Sir Jon Cunliffe told the Treasury committee that work on a digital pound regulated by the Bank of England had been delayed in September and October last year due to “pressure from other businesses”.
‘Just don’t have time’ to invest in digital currencies for banks consultation paper During the autumn months due to “pressure from other businesses”, Sir Jon said.
Late September, after Liz Truss September mini budgetBank launched Unprecedented Market Intervention Sterling slumps to prevent pension fund collapse as uncertainty hangs over markets record low.
Sir Jon questioned about delay Preparation of Consultation Documents MPs on Treasury Committee on so-called Britcoin.
He said the delay was not due to differences of opinion on policy between the bank and the Treasury. Nor has the post-mini-budget delay put the UK behind other countries in developing digital currencies.
“I don’t think we’re behind other advanced economies in this regard,” he said.
Whether the UK will create a central bank digital currency remains uncertain, although Sir Jon says it is “very likely”.
It is also uncertain when the digital pound will be introduced.
“What we’re trying to do is understand economic trends, payments trends, social trends and how trends and technology are going to play out,” he said.
“We didn’t know, and I would have thought, that enough of these trends were known to actually say ‘yes, let’s implement a really important piece of public infrastructure.'”
According to the Bank of England, the digital version of the British pound will not replace physical cash or existing bank accounts
But work is now being done on Britcoin to avoid a situation where it is determined that a digital pound is needed but the system has not yet been established, as the process could take up to five years.
“If we just wait until nine out of ten (a digital pound is needed), we still have at least five years,” he said.
“In the crypto world, you might be able to run a payments system very quickly, but it would be a very serious business that would have to be resilient, fraud-proof and secure.”
He said that the point of creating a Britcoin is not whether there is a current demand, but more about “creating new possibilities”.
“So it’s not a particular thing that we think needs to be done,” Sir Jon said. “It’s about breaking new ground for people to improve payment and the way we use money in transactions.”
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He also lists some new uses for digital currencies: They can be used to pay for very small payments, such as newspaper articles, or to automate payments, such as when an online delivery doesn’t arrive.
While cash is growing in popularity, with only 20% seeing it as the preferred payment method, it is available “as long as anyone wants it”.
“I expect cash to be around for a long time — probably decades,” he said.
Unlike cryptocurrencies, coins have an intrinsic value tied to the British pound.
Issued and controlled by the Bank of England, the digital pound will function like paper money. It is interchangeable with cash and bank deposits.
Currently digital currency is only issued to banks, not the general public, but with digital currency it is possible to send digital currency without the need for a bank account.