A digital pound has been met with scepticism by Bank of England (BoE) governor Andrew Bailey, who spoke out soon after finance ministers from eurozone countries endorsed further development of a digital euro.
Currently, there is a wholesale central bank money settlement system with significant improvement, and the governor of the Bank of England has questioned the necessity for a wholesale central bank digital currency (CBDC).
Further, Bailey stated that there are currently no intentions to eliminate cash from the retail sector. The governor of the Bank of England does not think there is a pressing need to alter retail payment methods at this time.
— Paul Taylor was Crypto punchie (@Punch1e1) January 17, 2023
He explained, “We have to be very clear about what problem we are trying to solve here before we get carried away by the technology and the idea.”
Bailey’s remarks mirror previous ones by a former BoE adviser on the costs and hazards of establishing a CBDC and fresh developments in the eurozone on a CBDC.
The European Central Bank is researching the feasibility of a digital euro. On January 16, the finance ministers of the nations participating in the eurozone released a statement supporting the ECB’s ongoing research. The Eurogroup acknowledged that further political debate is needed to implement a CBDC. The organisation also brought attention to its problems, such as environmental impacts, invasions of privacy, and the financial system’s instability.
In an editorial post published the same day, former BoE adviser Tony Yates claimed that developing CBDCs is not worth the expense and involved risks. Yates has also called into question the suspect intentions that led to the establishment of CBDCs.
Meanwhile, Russia and Iran are launching a new gold-backed stablecoin. Russian news source Vedomosti claims that Iran and Russia are working together to develop a “token of the Persian Gulf area” for international trade.