Bank of England Deputy Governor tells treasury committee CBDC could have “could have huge benefits for the economy and society”

“We have made a lot of progress on financial inclusion in the last few years. […] Sir John Cunliffe, Deputy Governor for Financial Stability, Bank of England, said at the Treasury Committee on the Crypto Industry on 28 February:

Indicating his willingness to consider introducing a CBDC or other form of stablecoin within the Bank of England, Cunliffe said, “CBDCs offer an alternative payment system in terms of resilience and therefore have financial stability benefits. ‘ said.

But he and others cautioned against stablecoins that are not bound by anything but a central bank.

“I think your comments about having public property and having things that are politically accountable and democratically accountable in the greatest sense of the word are really, really important. I think it’s more important for central banks to do CBDCs than to have overly libertarian tech billionaires do them.”

–Sarah Breeden, Executive Director of Financial Stability Strategy and Risk at Bank of England.

A CBDC to bank the unbanked?

Cunliffe added to the commission that he was angered by the slow pace of innovation seen in the traditional financial sector, especially in helping the unbanked.

He argued that, in theory, the crypto industry could do what the traditional banking sector already offers: mobile banking apps with KYC and deposit insurance, or lower barriers to entry for small depositors to go mobile. Said they didn’t offer more than providing additional services. However, many of these banks are still lagging behind, he added.

“Some banks said ‘there’s nothing you can’t do yet.’ And the dialogue was, why aren’t you doing it?”

“If you look at the UK, there has been a lot of progress in terms of financial inclusion in the last few years. This is a program that changed people who didn’t have a bank account to having a bank account.

“There will be fewer people using cash because cash doesn’t work in a digital society,” Cunliffe speculated, pointing to what he and others see as the trend toward a cashless society. Accelerate conversion and focus on tap payments and other internet commerce innovations. According to Culiffe, the number is expected to increase further in the next few years.

“As cash becomes useless,” predicts Cunliffe. [..] It has the potential to bring great benefits to the economy and society. ”

He said, “The way the current system is built, the multiple ledgers, the technology used, the lack of uniformity, the speed limitations, etc. can all be matched by using some of these new technologies. It suggests low. Will they be developed? I don’t know.”

“of question teeth have Created of money, If that leaf of banking system and to go Kindness of into the a CBDCs again a stable coin because this can break out and a stable coin As good, how do Bank after that Attract or money return again To confirmation their balance seat that is of balance?of other point To make teeth If there is teeth no a CBDCs, that won’t average these are technology go over there. “

Cunliffe and other members of the committee also warned about the repercussions from cryptocurrency speculation, but ultimately said banking and finance were always essentially about risk management.

“But it also means that if you have to deal with a failed bank again, there is another asset that people can take advantage of. , not because of the supply of credit to the economy, but if the banks failed, 60% of people’s money was trapped because their money was in commercial bank deposits. I think there are benefits.”

The full picture of the Parliamentary Finance Committee on the cryptocurrency industry can be found in the UK Parliament website.