Bank Of England Considers CBDC For Consumer Protection
Bank of England Deputy Governor Jon Cunliffe has said that a Digital Pound (CBDC) could offer consumer protection in the event of a failure in the banking system, according to a Bloomberg report. Cunliffe stated that the implementation of a CBDC could provide consumers with a safe place to store their assets. The Bank of England Governor added that consumers already live in an era of instantaneous bank runs where depositors can quickly move their money if they have solvency worries. However, a CBDC could intensify a run on a bank but would still offer a safe place for users to keep their assets.
JUST IN: 🇬🇧 Bank of England says a digital pound (CBDC) could protect consumers.
— Watcher.Guru (@WatcherGuru) February 28, 2023
Britcoin
The Bank of England and the Treasury are exploring a CBDC called the “Britcoin,” which would be backed by the central bank and government. The bank has set a realistic timeline for the CBDC to be launched by 2030. Cunliffe’s comments on the benefits of a CBDC come amid the ongoing global trend of nations implementing central bank digital currencies.
Cunliffe’s view on the potential benefits of a CBDC echoes sentiments expressed by other central bank officials around the world. These officials believe that the implementation of CBDCs could offer greater financial stability and could also promote financial inclusion by making financial services available to a broader audience. In addition, the use of CBDCs could enhance the efficiency of payments and make them cheaper, faster, and more secure.
Potential Drawbacks of CBDCs
However, some experts have also raised concerns about the potential drawbacks of CBDCs. For instance, some have argued that the use of CBDCs could lead to the disintermediation of traditional financial institutions, thereby reducing their ability to lend money and potentially leading to financial instability. Moreover, some worry that the anonymity of CBDC transactions could facilitate money laundering and other illicit activities.
Despite these concerns, many countries around the world are moving ahead with CBDC plans. For example, China has already launched a CBDC, and other countries such as Sweden, Japan, and the United States are exploring their own digital currencies.
