Sarah John, the chief cashier at the Bank of England, has stated that it is imperative that central banks in the world consider researching and supporting digital currencies before it is too late for them, Telegraph UK reports. She said,
“We need to think as an institution about how to position ourselves to make sure society still has a broad range of payments that it can use with confidence.”
“It is absolutely right that central banks think about whether a public sector or private sector would be best to provide a digital currency going forward.”
Central Banks Need to Dominate Digital Currency Space
As the BoE’s chief cashier, Sarah is also the director of notes. She also noted that it is also the time for central banks to come up with ways to define what role should be played by the private firms which are offering their respective cryptocurrencies.
Central banks all over the world are increasingly concerned about the rise of cryptocurrencies especially after Facebook announced its intention to introduce the Libra stablecoin. Indeed, BoE together with seven other financial institutions around the world started a working group last month which is geared towards sharing research as well as findings of the formation and the operations of a CBDC.
One of the members of the working group, Sweden’s Riksbank, revealed on Friday that it is set to pilot a fresh e-krona project which will run up to 2021. The testing will allow the bank to get firsthand knowledge on the effectiveness of CBDCs in the economy.
In 2019, Mark Carney, BoE’s outgoing Governor explained that a digital currency issued by a central bank, has the potential to overthrow the US dollar from the helm of the world’s hedge currency. Carney will be replaced by the current U.K.’s Financial Conduct Authority CEO Andrew Bailey. Carney’s term will come to an end on March 16.