In September Bitcoin Magazine reported that Andrew G. Haldane, chief economist at the Bank of England (BoE), hinted at the possibility that the U.K. government might issue a digital currency.
“What I think is now reasonably clear is that the distributed payment technology embodied in Bitcoin has real potential,” said Haldane. “Bitcoin’s ‘blockchain’ technology appears to offer an imaginative solution to that distributed trust problem. That is why work on central bank-issued digital currencies forms a core part of the [BoE]’s current research agenda.”
Haldane left as open questions whether blockchain technology could support central bank-issued digital currency, and whether the public would accept it as a substitute for paper currency.
Earlier this month, Ben Broadbent, BoE’s deputy governor, said that distributed ledger technology could make retail payments more efficient and the financial system as a whole more resilient.
“The main point here is that the important innovation in bitcoin isn’t the alternative unit of account – it seems very unlikely that, to any significant extent, we’ll ever be paying for things in bitcoins, rather than pounds, dollars or euros – but its settlement technology, the so-called ‘distributed ledger,’” he said.
Broadbent confirmed that the BoE is actively pursuing distributed ledger research, and added that a central bank digital currency would involve putting reserve deposits on a distributed ledger.
“The issue of digital currencies forms an important part of our One Bank Research Agenda,” concluded Broadbent. “In publishing the Agenda a year ago, we asked for help, hoping to encourage ‘the wider academic community’ to think about the big policy questions.”
The One Bank Research Agenda paper noted that blockchain fintech could reshape the financial industry and called for further research to devise a system that could use distributed ledger technology without compromising a central bank’s ability to control its currency.Now, British researchers have invented a […]
