Bank of England: Central banks should consider developing CBDC to counter the tech giant ’s lead in digital payments

According to Cointelegraph report on February 24, the Bank of England (BoE) general manager Sarah John recently expressed his support for digital currency issued by the state, and she urged other central banks to consider developing central bank cryptocurrencies in response to the recent private enterprise Frequent actions in the field of digital payments.


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John said that central banks should regard "Central Bank Digital Currency (CBDC)" as "an option to deal with the development of stablecoins by large tech companies", which is "very important".

The Bank of England executive warned that failure by central banks to act quickly could cause regulators to lag far behind private companies in digital payments. She claims that for the central bank, "considering whether the public or private sector is the best option for providing digital currencies in the future". She said:

"It is absolutely correct for central banks in each country to consider in advance whether the public or private sector is the best institution to issue digital currencies in the future."

FSB urges regulators to speed up development of CBDC

A few days after John issued a statement, Randal Quarles, chairman of the Financial Stability Board (FSB), urged the members of the Group of 20 (G20) to accelerate the pace of developing virtual currency and stablecoin regulatory mechanisms.

In a letter to central bank governors and finance ministers, Kwars emphasized the speed of innovation in digital payments and the emerging stablecoin, and expressed his determination to "accelerate the development of necessary regulatory measures to address these new tools." He wrote in the letter:

"As the field develops and evolves, new loopholes that need to be assessed may emerge. The Financial Stability Board is forming a group to consider what is appropriate and whether to rectify existing work for non-bank financial intermediaries."

On February 23, the Group of 20 issued a communiqué stating that “global stablecoins need to be evaluated and properly addressed before they begin large-scale operations.” The Group of 20 pledged to support the FSB “to work hard to develop Relevant regulatory recommendations. "

The document also requires the FSB to develop a roadmap to strengthen global cross-border payments by October 2020.

Central banks have differing views on CBDC

In January this year, the Bank of England and five other central banks formed a group to discuss the need for the government to issue virtual currencies to prevent Facebook's planned cryptocurrency, Libra, from undermining governments' currency sovereignty.

The group includes central banks and the Bank for International Settlements in Canada, the European Union, Japan, Sweden, Switzerland, and other countries. Coeure).

However, at a recent conference hosted by the National Bank of Ukraine in Kiev, many central bank representatives expressed caution about the CBDC. Scott Hendry, senior special director of fintech at Bank of Canada, said:

"If you look at interbank payments only, distributed ledger technology (DLT) systems don't seem to have many advantages over current efficient centralized systems."

Harro Boven, policy adviser to the Dutch central bank's payment policy department, explained the inherent contradictions of the CBDC at the meeting, saying:

"The nature of the DLT infrastructure is that neither party should be trusted enough, but don't we believe that the central bank can maintain the integrity of the global ledger?"

Public skeptical of tech giant's virtual currency plan

Earlier this month, a poll conducted by the Official Monetary Financial Institutions Forum (OMFIF) found that most people around the world do not support virtual currencies issued by technology companies, and 51% of respondents said that the central bank Will be the most trusted entity for issuing digital currencies.

OMFIF Chairman David Marsh said traditional financial institutions were "anxious to deal with shocks to their established market position," adding that technology companies "are making a radical move to build a payment business prepare for".