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Bank of England governor questions need for digital pound

Bank of England governor questions need for digital pound

The governor of the Bank of England (BoE), Andrew Bailey, expressed scepticism about the necessity for a digital pound immediately after eurozone finance ministers agreed to continue work on a digital euro. 

The governor of the Bank of England recently questioned the need for a wholesale central bank digital currency (CBDC), arguing that a “wholesale central bank money settlement mechanism with a major improvement” presently exists.

Furthermore, Bailey stated that there are no intentions to eliminate currency from retail use. The governor of the Bank of England believes that retail payments do not need to alter at this time. He elaborated: 

“Before we get carried away by the technology and the concept, we need to be very clear about the problem we’re trying to solve here.”

Bailey’s remarks come in the wake of new CBDC developments in the eurozone and recent comments from a former Bank of England adviser on the costs and hazards of establishing a CBDC. 

On January 16, eurozone finance ministers issued a statement supporting the European Central Bank’s ongoing work on a potential digital euro. The Eurogroup acknowledged that the adoption of a CBDC necessitates more political debate. Furthermore, the committee underlined the challenges it was observing, such as environmental consequences, privacy, financial stability, and other concerns. 

On the same day, Tony Yates, a former Bank of England adviser, wrote in the Financial Times that the costs and dangers associated with CBDC development were not worth it. This article focuses on the creation of CBD as well as the use of CBD.

Meanwhile, Iran and Russia are contemplating the creation of a new gold-backed stablecoin. According to the Russian news source Vedomosti, Iran is working with Russia to develop a “token of the Persian Gulf region” to facilitate cross-border transactions.

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