Dave Ramsden, deputy governor of the Bank of England, said that the development of some form of synthetic central bank digital currency is "worthy."
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Ramsden, who is responsible for payments and financial technology, said the UK's central bank is "very focused" on measures that provide public infrastructure to encourage private innovation. Creating digital currency with other central banks is “worthy to look at because there are big problems with current payment costs and efficiency.”
Bank of England Governor Mark Carney had previously suggested this idea. In a striking speech in Jackson Hole, Wyo., in August, he proposed to replace the US dollar with a stable currency. The notion of the role of the international reserve currency, such as Facebook's Libra. The Bank of England governor told lawmakers in London on Tuesday that the products currently offered to consumers and businesses "are not good enough in today's era."
Ramsden said in an interview with Bloomberg on Thursday:
“We should constantly challenge ourselves as to whether we should do more, because the consumer needs of both developed and developing economies are all about improving efficiency. There is a big prize here.”
Regarding the concept of synthesizing the central bank's digital currency, Bank of England Governor Carney once said in August that the public sector would provide a new "synthetic hegemonic currency (SHC)" through the central bank's digital currency network. He says:
“Even if the initial version of the idea is not perfect, the concept is interesting. SHC can suppress the strong impact of the dollar on global trade.”
From this point of view, Carney's point of view is not entirely his personal view, and now there is already the concept of SHC within the Bank of England. The Bank of England may have further moves in the future.
At the same time, Benoit Coeure, a member of the European Central Bank's board of directors, said this week that regulators must be prepared for the digital currency revolution, and the central bank must adapt to this change. A report from the Group of Seven said that the money created by private companies would pose challenges to competition and antitrust policies.
The Bank of England appreciates Libra
Unlike the two Libra opponents, France and Germany, the Bank of England seems to appreciate Libra. In August, Bank of England Governor Mark Carney proposed a radical proposal to overhaul the global financial system, which would eventually replace the dollar as a reserve currency with a Libra-like virtual currency. He said that the status of the dollar as a global reserve currency must end, and some form of global digital currency – similar to Facebook's proposed Libra – would be a better choice.
France and Germany are strongly opposed to the development of Libra, and clearly stated that they will jointly prevent Libra from developing in Europe. French Finance Minister Bruno Le Maire said recently that Libra should not develop in the EU because it threatens the monetary sovereignty of member states. Denis Beau, the first deputy governor of the Bank of France, said that the risks brought by Libra must be resolved before its official launch.
At the International Monetary Fund and World Bank Fall Conference on Friday, German Finance Minister Scholz emphasized that stable currency may pose an international risk. He expressed complete suspicion of Libra and pointed out: "We will do everything possible to examine the situation. I do not agree to create such a world currency, because this is the responsibility of a democratic country."