The Bank of England (BoE) has conducted extensive research on the best format for developing a digital pound to complement the fiat system.
Bank of England (boe) Central bank working to re-establish pound as preferred global reserve currency through digital currency (cbdc, The rise of the digital economy after the COVID-19 global pandemic through the cryptocurrency market has made most of the governments think about moving towards Decentralized Ledger Technologies (DLT). Furthermore, the use of the digital economy is not only sustainable but also scalable in international markets. As a result, the forex market will greatly benefit from faster verifiable digital currencies and the cryptocurrency market will benefit as well.
BoE on digital pound key selling features
Over the years, the Bank of England has collaborated with various institutions in the research of an ideal central bank digital currency. For example, in February 2022, the Bank of England and the Massachusetts Institute of Technology (MIT) agreed to collaborate on a twelve-month research project on CBDCs. The Bank of England has also held several consultations with the public on how to develop and implement a CBDC.
As a result, the BoE noted that digital sterling or more popularly called Britcoin will primarily focus on user privacy. According to Tom Mutton, director of fintech at the Bank of England, the bank may consider other technologies beyond blockchain in developing its CBDC. However, Mutton said that the bank will pay a lot of attention to user data security to ensure that the government does not become a tracking agent for users.
“No data will be shared with the Bank of England, we will know if a transaction has taken place but we will not have any data about the person who carried it out. While the wallet provider will have user data but will not have access to their transaction data,” said Mutton.
Reportedly, the Bank of England is working with the private sector to develop a compatible CBDC, comparing the efficiency of using blockchain technology compared to traditional traditional ledgers.
“We want to be compatible with the distributed-ledger business model in the private sector, but we are not convinced that distributed ledgers provide more efficiency than traditional ledgers,” he said. couple,
Currently, the Bank of England and the Treasury Department are awaiting feedback from stakeholders which is open until 30 June.
market Outlook
The Bank of England is competing with the times to avoid losing its aesthetic appeal to other global currencies such as the Chinese yuan, which have already moved to a digital format. The launch of the digital pound comes amid high interest rates of around 5 percent, despite the Bank of England’s Monetary Policy Committee (MPC) trying to reduce inflation to 2 percent.
As Britain operates free from the shackles of the European Union, its future economic growth prospects are tied to the ties the country will sign after Brexit.
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