In a speech published on Wednesday, Andrew Bailey, the Governor of the Bank of England, discussed at length the future of digital money, CBDCs, and stablecoins. He expressed a firm belief that the implementation of stablecoin-like digital money shouldn’t displace the current forms money, and added that CBDCs are likely to play a crucial role in the future of money in all forms.
BoE’s Bailey Believes Banks Shouldn’t Leave Everything to CBDCs
In his Wednesday speech, Andrew Bailey expressed his belief that while the future of stablecoins and other cryptocurrencies is not guaranteed, banks and governments would be making a dire mistake if they failed to implement an accommodating legal framework. He also drew a distinction, mirroring the views Warren Buffett recently expressed about Bitcoin, between stablecoins and other cryptocurrencies.
According to the Governor of the Bank of England, while cryptocurrencies in the general sense are highly speculative assets, stablecoins have a credible claim to being another form of money. He, however, pointed out that if they are ever to truly fulfill that role in a credible way, they would need to be regulated by relevant authorities in the same manner as regular money.
Bailey also called on banks to actively think about commercial digital money, rather than leave the future to hypothetical CBDC, but he also stated that central bank digital currencies are likely to play the role of an “anchor” for the value of all forms of money in the future. He also echoed previous comments made about the development of the digital pounds reiterating that planning and preparations should be made without rushing and thoroughly.
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Britain’s Quest For the Digital Pound
For several years, the UK has been a part of the race for the development of its own central bank digital currency. Recent months in particular have seen an uptick in activity with the country’s central bank starting an active search for a Head of CBDC in January. More recently, it was reported that the UK is looking to hire a 30-strong team of experts for the development of digital currencies.
By early February, the digital pound received both an official roadmap and a catchy nickname—Britcoin. Not all have, however, proven thrilled by the prospect of the creation of a British central bank digital currency. An advocacy group based in the United Kingdom called the Tax Reform Council, for example, believes that the development of a CBDC would have dire implications for privacy and individual rights and recently started a campaign to prevent its introduction.
The Tax Reform Council isn’t the only entity in the world to believe that the introduction of central bank digital currencies could prove detrimental. Florida’s Governor Ron DeSantis recently introduced a bill that would prevent the use of the hypothetical digital dollar in the state. Despite the criticism, the drive for the development of CBDCs remains global. Earlier this week, Montenegro became the latest country to join the effort with a partnership with Ripple.
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