The latest reports reveal that the Bank of England (BoE) is now keeping central bank digital currency (CBDC) research high on its 2020 agenda. BoE will take part in a crucial meeting on August 19 to discuss CBDCs and their possible infrastructural designs.
The Official Monetary and Financial Institutions Forum (OMFIF) will host the roundtable discussions that will comprise of the BoE’s senior fintech specialist, Simon Scorer, and the delegates from the Hungarian National Bank (Magyar Nemzeti Bank), ING Nederland, and the Swiss National Bank. Cypherium’s CEO, Sky Guo, will also join these discussions.
A primary focus of this meeting will be to determine the different ways in which blockchain technology can benefit different models for CBDCs. That includes the use of smart contracts like the case with designs for ‘programmable money’; and model for interoperable blockchain networks both with and beyond the national borders.
Guo stated that as long as the CBDCs remain in their early phases of conception:
“Now is the time to debate the advantages and disadvantages of infrastructural ideas; especially related to how these instruments will interact and operate with each other.”
Each of these central bank delegates will present their institution’s findings from internal CBDC research. The delegate includes Magyar Nemzeti Bank’s chief digital officer Anko Szombati; Swiss National Bank governing board member Thomas Moser, ING’s blockchain team IT specialist Cees Van Wijk, and the BoE’s Simon Scorer.
The private sector pressure coming from the likes of Facebook has majorly spurred an estimated 80% of the world’s central banks, according to the OMFIF. The central banks are now looking seriously into CBDC issuance and simultaneously assessing the different infrastructural possibilities; including blockchain technology for the CBDC networks.
Bank of England issued an in-depth discussion paper in March 2020 devoted entirely to CBDCs. The paper analyzed the rapidly changing payments landscape; and the probable role for CBDCs to support the bank’s task of managing financial and monetary stability. The same paper included an appeal for comments on the BoE’s conceptual ‘platform’ model for a potential CBDC.
Shortly before assuming the role of BoE governor earlier this year; Andrew Bailey openly expressed his skepticism about the private and decentralized cryptos including Bitcoin (BTC). He warned investors that they had better be prepared to lose all their money if they decide to hold the asset.
Since then, Bailey has toed a positive line toward CBDCs. He noted this July that the BoE will continue to look seriously at the question of whether or not to issue a digital currency; as it potentially has major implications on the nature of payments and society.