Speaking on the future of central banking, Mark Carney says the primary role of banks is maintain trust in money. As for cryptocurrencies, a Bank of England-backed coin is, for now, not being seriously considered because the current volatility inherent in the coins prevent them from being a secure medium of exchange.
At the panel in Stockholm, the BoE governor said the ‘past, present, and the future’ of institutions comes down to maintaining public confidence.
Carney also reiterated that in order to keep money safe, the BoE has overhauled the financial system since the financial crisis, in attempts to make it more resilient to unexpected turns like 2016’s Brexit vote, according to Bloomberg.
The governor also said he was open-minded about the prospect of a central-bank-issued digital currency, but added such a move was not imminent, because, as Carney believes, digital currencies currently don’t perform the role of money.
Carney and the Bank of England
Speaking in March, Carney called for government regulation of cryptocurrencies, saying that ‘the time has come to hold the crypto-asset ecosystem to the same standards as the rest of the financial system.’
Carney, who also heads the Financial Stability Board, an international finance regulator, is part a growing number of industry insiders calling for greater oversight of the coins.
In his argument, Carney said that digital currencies have ‘extreme volatility,’ and noted that they reflected a lack of any intrinsic value, further stating that digital currencies themselves have failed as a form of money because of this volatility.
He also rejected the prospect of a central bank digital currency in the near future — but did say the BoE remains open-minded about the possibility.
BoE-Issued Digital Currency
Whilst the BoE are indeed studying the implications of central bank issued digital currency, a government minister has stated that there are no plans in the immediate future to launch their own.
The issue was raised by a Labour MP in early February, when Barry Sheerman asked ‘whether the government will introduce a fiat digital currency.’
John Glen, the Economic Secretary to the Treasury and City Minister, responded, saying:
“The Bank of England does not currently plan to issue a central bank-issued digital currency… However, the Bank is undertaking research to better understand the implications of a central bank issuing a digital currency.”
These moves actually seems contrary to public opinion in the U.K., according to a recent survey conducted by market research and polling company D-CYFOR. It found that 60% of those surveyed indicated that they would not be in favor of a BoE-backed digital currency.
Notably, though, the research also found that 93% of Britons have now heard of Bitcoin, likely a much higher percentage than it would have been a year ago since the value of the digital currency skyrocketed towards the end of 2017.