The Bank of England (BoE) could herald a digital currency very soon. In a decision led by the BoA, the central banks of the world's leading countries agreed to meet to discuss the advantages and disadvantages of central bank-backed digital currencies (CBDC).
Among the banks to discuss the issue are the Bank of Japan, the European Central Bank, the National Bank of Sweden, the Bank of Canada, the Swiss National Bank and the International Payments Bank. These institutions and their officials will conduct a joint investigation to see the potential of central bank-backed digital currencies.
Bank of England Deputy Chairman Sir Jon Cunliffe and former European Central Bank board member Benoît Cœuré will lead the group. In fact, many central banks and regulators had taken action after Facebook introduced its own digital currency, Libra, last year. While many of the regulators and central banks are considering how to prevent it, those who understand it is impossible to prevent it have moved to compete.
Of course, digital currencies backed by the central bank have certain risks and dangers, as can be read from this news. However, it is obvious that such a development will change the course of the sector completely.
We can even consider the launch of a joint central bank digital currency with an initiative recently initiated by the above central banks. While it is not yet clear whether Libra will be released, Bank of England chief Mark Carney had given significant clues about the issue. Carney also showed how he looked at the sector, highlighting the decline in the strength of the titular currency and the digitisation of the global economy.