RSCoin , a cryptocurrency controlled by the Bank of England for the purpose of strengthening the country’s economy and global trade, combines the benefits of distributed ledger technology with the control of traditional, centrally managed currencies, according to The Deal Room , a financial news website. RSCoin was developed by University College of London researchers at the central bank’s suggestion. While RSCoin uses cryptography – making it tamper-proof and resistant to counterfeiting – the digital ledger used by the newly-developed cryptocurrency is entirely held within the confines of the central bank, according to an earlier CCN report. RSCoin’s system will be accessible by a specific encryption key that will be in possession of the central bank. Some third-party collectives like commercial banks will be chosen by the central bank to partake in the central ledger. Digital Currency Benefits The bank recognizes that digital currency transactions can be executed more efficiently than traditional currency transactions and with more visibility. A fundamental difference between RSCoin and other cryptocurrencies is that the bank believes its oversight divorces RSCoin from negative characteristics associated with other cryptocurrencies. The Bank of England is one of a few central banks that are developing their own digital currencies, going a step further than those financial institutions that are utilizing blockchain technology to improve operating efficiencies. Another central bank expanding its digital currency is the People’s Bank of China. In the current environment of negative or low-interest rates, digital currencies could provide monetary policy tools not previously available, noted Matthew Commons, CEO of Cambridge Blockchain LLC. The Bank of England believes distributed ledger technology allows the payment system to work in a decentralized manner. In this respect, RSCoin is not a departure from conventional currencies that are electronically recorded. Bank Seeks to Expand RSCoin The Bank of England […]
