UK will likely need to issue a digital currency, says BoE deputy governor
May 14, 2021. Summarized by summa-bot.
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Bank of England Deputy Governor Jon Cunliffe has said a CBDC could be crucial to ensuring financial stability if non-state actors begin to issue digital currency.
The Bank of England's deputy governor Jon Cunliffe has argued that a sea change in the issuance and circulation of public and private monies could make general access to a digital form of central bank money crucial for ensuring financial stability in future.
In a speech at the OMFIF Digital Money Institute in London, Cunliffe reflected on past, present and future trends in the widespread use of private money issued by commercial banks, noting that the COVID-19 pandemic has accelerated existing trends away from public to private money for everyday payments.
Whilst this shift away from public money in the form of cash towards private, commercial bank money continues to accelerate, Cunliffe predicted that newer technologies are likely to spark an equally significant change in the use and even concept of money, with potential implications for its resilience as a social convention.
Without anticipating the Bank of England's forthcoming published study of these challenges, Cunliffe argued that new forms of private money likely make a strong case for the introduction of a public digital money (e. g. , a central bank digital currency, or CBDC) in order to anchor public confidence in the uniformity of money; in other words, confidence in the substitutability of all monies in the national economy.