The idea of state-run central banks getting in on digital currency evolution is gaining traction, especially as the coronavirus is forcing changes on how money is viewed on a global scale. The Bank of International Settlements (BIS) indicated recently that more governments are now getting involved in exploring the possibility, and one of the first countries to have considered a central bank digital currency (CBDC), the U.K., continues to develop its initiative. One of the things determined by the country’s central bank, the Bank of England (BoE), is that it might be more beneficial to turn to a private digital currency, instead of trying to build a completely new alternative.
The BoE began exploring a CBDC about two years ago, and has continued to advance its efforts since then. Most recently, it began exploring use cases for digital currency while acknowledging that the alternative could have a negative impact on current banking and financial structures. Still, it appears that the wheels are already in motion, and BoE analysts said during a webinar yesterday that private entities might ultimately be able to provide a digital solution better than a central bank could design.
Ben Dyson, a BoE analyst working on the CBDC initiative, points out that digital currencies still don’t fulfill the requirements needed to be considered an alternative to fiat, but added that this “doesn’t mean that it’s impossible for somebody to improve upon that technology and create something that much better fulfills the qualities of money.” He added, “We’ve seen proposals over the last year from large technology firms, for example,