The deputy governor of the Bank of England for stability, Sir Jon Cunliffe, declared yesterday that it “looks probable” for the central bank of the UK to issue a CBDC in the hope that public money will survive the increasing number of private alternatives.
“We may not be there yet. But it looks probable in the UK that if we want to retain public money capable of general use and available to citizens, the state will need to issue public digital money that can meet the needs of modern-day life.”
Still, at least officially, the Bank of England hasn’t come to a conclusion regarding the release of a CBDC, a situation that is similar to that of many national banks around the globe.
A month ago, the Bank partnered up with Her Majesty’s Treasury to create a joint task force for analyzing the idea of releasing a digital pound.
Cunliffe also addressed the plethora of risks and benefits that have to be taken into consideration before making any decision: “Introduction of a CBDC would be a very major public project which would have material implications for the financial sector, many parts of the economy and for society more broadly.”
The deputy has also mentioned that it seems inevitable for private stablecoins to join the market:
“There is now the very real prospect of non-banks, including the large technology platforms or ‘big techs’, issuing new forms of digital money, such as ‘stablecoins’ for general payment purposes. These are likely to have greater functionality and lower transaction costs than the current commercial bank digital money offering and could quickly attract a large number of users.”