Bank of England Is Still Exploring Pros and Cons of CBDC, No Final Decision Regarding Its Launch

Various central banks from all across the entire world are interested in exploring the risks and benefits associated with the implication of Central Bank Digital Currencies (CBDCs) before issuing it. One of them is the United Kingdom’s central bank the Bank of England (BoE) which has not officially made any decision regarding the release of its digital currency and is still exploring its effects and implications.

“Exploring the pros and cons with interest”

Tom Mutton, the fin-tech Director at the Bank of England has said during his speech at the Shanghai’s 2nd Bund Summit that the central bank is still exploring with interest the “pros and cons” of a retail central bank digital currency and that they have not yet made any final decision whether they will launch their respective CBDC or not.

The bank executive said that their main intention is to provide merchants and shoppers with convenient, efficient, and safe payments. Therefore, they are continuously exploring more payment options saying that the central bank digital currency is their main focus.

Furthermore, he said that there are some things that a retail centralized digital currency needs to display. CBDC should have a clear use case. Mutton said that their initial focus will be to explore whether a central bank digital currency has a clear payment use case or not. Then he said that CBDC must need to complement all other forms of money whether it is commercial bank money or are banknotes. It should also be capable of coexisting with them.

Adding more to it he stated that another quality a central bank digital currency should possess is that it must not be harmful to financial and monetary stability. Rather he said that it should support the country’s “future use cases” and “payment needs” including micropayments.

In the end, Mutton asserted that the most important thing is privacy which cannot be negotiated. Therefore, it is crucial that retail CBDC should be able to preserve privacy. Mutton assured that the central bank will continue exploring advantages as well as disadvantages of central bank digital currencies keeping in view these aspects.

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