The Bank of England (BoE) has made the mainstream media  reporting landscape once again about adopting cryptocurrency. Or what  they prefer to call Central Bank Digital Currency (CBDC) — with the only  significant difference being that CBDC's are issued by the State and  have legal tender status declared by the government.

This fresh mainstream media storm was ignited by the news that the UK is but one of six countries in The Bank of International Settlements (BIS) in a group to share intelligence on research and deeper investigation into the potential cases for national CBDC's.

But this is not the first time that the BoE has shown interest.

Deputy Governor for Monetary Policy of the Bank of England, Ben Broadbent was already touting it in early 2016 in a speech at the London School of Economics in London. As well as in a staff working paper in 2018.

And as reported at Blockchain News, due to the murder of UK Labour MP Jo Cox, Bank of England Governor Mark Carney cancelled his speech called "Enabling the FinTech transformation: Revolution, Restoration, or Reformation? " that was to have been given at the Lord Mayor's Banquet for Bankers  and Merchants of the City of London at the Mansion House, London on June  16, 2016.

Carney also addressed The Financial Stability Board (FSB) in 2016 on CBDCs:

The  ledger, once stone, wood, or paper — and always centralised — is now  digital and may become distributed. Fintech has the potential to deliver  more resilient financial infrastructure, more effective trade and  settlement, and new ways to encode, share and analyse data."

"For  the financial sector, these could offer shorter, speedier transaction  chains; greater capital efficiency; and stronger operational resilience.  For consumers, they could mean more choice; better-targeted services;  and keener pricing. For everyone, fintech may deliver a more inclusive  financial system, domestically and globally; with people better  connected, more informed and increasingly empowered."

In another Blockchain News article in 2017 Canadian Carney, Speaking at the Deutsche Bundesbank G20 conference on "Digitising finance,  financial inclusion and financial literacy", said that the BoE is  looking into the policy and technical issues posed by Central Bank  Digital Currencies (CBDC) and is already developing Blockchain  proofs-of-concept.

"Emerging technologies, such as distributed  ledger, could in future offer significant gains in the accuracy,  efficiency and security of processes across payments, clearing and  settlement as well as better regulatory compliance. In the process, tens  of billions of dollars of capital may be saved and resilience could be  significantly improved," stated Carney.

"Securities settlement, in  particular, seems ripe for innovation; a typical settlement chain can  involve many intermediaries, making securities settlement comparatively  slow, operational risks and costs high."

And in 2019, Carney raised a storm with his call for a global monetary system to replace the US dollar.  Adding that a "Synthetic Hegemonic Currency" (SHC) governed by the  public sector and backed by a number of central bank digital currencies  could replace the US dollar as the global reserve currency and that this  would be preferable to the alternatives, such as the Chinese  Yuan/Renminbi becoming the global reserve.

He unleashed the controversy at the Economic Policy Symposium in Jackson Hole, Wyoming, USA by stating that while the U.S. dollar is  facing pressure due to globalization and trade disputes — and the impact  on national economies is stronger today than it was in the past, there  needs to be a new global monetary system to replace the US dollar.

The U.S. economy is about 25 percent of the global economy in terms of total dollars but is significantly  less if you adjust for price differences across countries. The American  dollar is even smaller relative to world trade- but, the dollar is the  dominant currency for trade invoicing and cross-border payments across  the world. More than 50 percent of all international trade is  denominated in dollars, while 30 percent is denominated in euro. The  remainder is a blend of other currencies — the British pound, Japanese  yen, and Chinese yuan.

From Carney's speech:

"Even  a passing acquaintance with monetary history suggests that this centre  won't hold. We need to recognise the short, medium and long term  challenges this system creates for the institutional frameworks and  conduct of monetary policy across the world. Given the experience of the  past five years, I will close by adding urgency to Ben Bernanke's  challenge. Let's end the malign neglect of the IMFS and build a system  worthy of the diverse, multipolar global economy that is emerging."

The  Canadian said that the best solution in terms of stability would likely  be a diversified multi-polar financial system, something that could be  provided by technology. He stated that the dollar's destabilizing  reserve status role in the world economy has to end, and explained that  one option was for central banks to join together to create their own  replacement reserve currency, one tied to an SHC.

Carney  unsurprisingly talked about Facebook's Libracoin as he broke ranks with  other central bankers to say he was keeping 'an open mind' about  Facebook's new currency Libra — the most high-profile proposed digital  currency to date according to Carney. But, he added that it faced a host  of fundamental issues that have yet to be addressed. Carney is currently under fire by the UK media for secretly meeting Mark Zuckerberg at Facebook in  California, on April 16, two months before Libra was unveiled.

"As  a consequence, it is an open question whether such a new Synthetic  Hegemonic Currency (SHC) would be best provided by the public sector,  perhaps through a network of central bank digital currencies," the head  of the BoE added.

Carney is not alone — chief economic adviser at Allianz Mohamed El Erian, IMF Managing Director Christine Lagarde, Putin and the Kremlin, and the Chinese central bank have all suggested that a new currency is coming to replace the dollar.

Originally published at Blockchain News.

Written  and submitted by Richard Kastelein, Father. Husband, Tokenomist, Publisher, Writer, Entrepreneur, Fellow Royal Society Of Arts,  Dutch-Canadian based in Groningen, Netherlands Richard can be found on  Twitter @expathos

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