The economic effects generated by digital currencies in the attention of the Bank of England

Bank of England chief cashier Sarah John said it is “crucial” for central banks to investigate digital currencies. In his opinion, this is especially important from the perspective of the initiatives of launching these coins by private companies.

Sarah John said it was “really important” for the bank of England and other central banks to consider whether digital currencies could be the basis of a new payment system. In this case, it is necessary to “accelerate the pace” regarding the way of regulating the new asset class.

“It is absolutely necessary for central banks to think about whether the first to offer digital currency should be a public or a private sector”

Sarah said.

The economic effects generated by digital currencies

She also argued that the Bank of England should consider its position on technology to ensure that the UK offers “a wide range of payment methods that can be used with confidence”.

As Head of the Bank of England Cashier, Sarah is responsible for issuing banknotes in the UK. From this point of view, its exhortation regarding the importance of digital currencies is very relevant.

In her statement, Sarah John also mentioned that central banks must determine how to define the role of private companies issuing their own cryptocurrencies in the future. She referred in particular to the Libra stable cryptocurrency proposal launched by Facebook.

The Bank of England is one of seven financial institutions that co-founded a new working group to explore the CBDC (digital currency issued by a central bank) this year. In January, several central banks decided to collaborate in the field of research on digital currencies issued by central banks.

These include Riksbank from Sweden, which has already announced a pilot project for an e-krona. The Bank of Japan also held several meetings with several ministries to discuss the economic effects of digital currencies.

Japanese politicians have expressed concern about the possibility that digital currencies, such as those developed by China, will affect the dollar-based economic order. Currently, the bank of Japan has no plans to launch a digital currency, but is studying the technology.