The Bank of England and the Treasury have previously announced that they will not make a final decision on the state-backed digital currency, also known as cryptocurrencies, until 2025 at the earliest. on the introduction of central bank digital currency (CBDC).. Due to data protection concerns raised during the consultations, decision-makers are handling the issue cautiously, reports Reuters.
Bailey expressed his position at the Group of Thirty forum in Washington:
This (CBDC) is not my preferred option, but we cannot rule it out.
The governor stressed that while Britain already has an advanced electronic payments infrastructure, future forms of digital currency could offer additional options, such as automatic payments.
The head of the BoE said that commercial banks would be best suited to introduce innovations, but expressed concern that they did not see enough evidence of this. “At the Bank of England, we are continuing to prepare for a retail CBDC because, frankly, we don’t yet see enough evidence that the innovation will take place in the commercial banking system,” Bailey said.
The governor of the central bank pointed out that the possible reluctance of commercial banks to innovate may be related to the high profit margins from the current system.
According to Bailey, if these profit margins stifle innovation and competition, it could justify the introduction of a residential CBDC.
Source: Reuters
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