Bank of England: Private companies could play a role in issuing digital currency

Bank of England: Private companies could play a role in issuing digital currency - bank of england 2d ryanking999 100804672 large 827316 1024x576In a Tuesday webinar, Bank of England (BoE) analysts working on the UK central bank's digital currency (CBDC) initiative said there was a clear possibility that private companies could play a much more important role. broad in the issue and distribution of money.

Although the BoE has previously said that bitcoin (BTC) and other similar cryptocurrencies do not meet the criteria necessary to be considered money, CBDC analyst Ben Dyson said, "this does not mean that it is impossible for someone to improve that technology and create something that meets the money requirements much better. "

Dyson did not mention the Libra project that was unveiled last June. Since its announcement, Libra has undergone a decisive rejection by regulators and politicians around the world.

Skepticism from Stablecoin

The views of the BoE on private currencies are different from those of other central banks, who specifically talked about the Facebook initiative and much more. In February, U.S. Federal Reserve Governor Lael Brainard said that the motivation for CBDC research was to thwart private currencies, such as Libra, which could exist without complying with U.S. regulation.

It is widely believed that China has accelerated its plan for invest in a digital yuan against a possible rival Facebook currency. French and German officials also expressed their opposition regarding Libra and said that such initiatives may not even be legal in their jurisdictions.

Just a month ago, the Canadian central bank governor said he would issue a CBDC just to react against a potential threat like Libra. It is not the first time that the BoE has taken a more conciliatory approach to Facebook's currency.

"The key thing for the Bank of England is to make sure that if we were to do a CBDC - and it's a if - it would absolutely respect people's rights to privacy," said Tom Mutton, BoE's fintech director.

Focus on privacy

Like much of Europe, the United Kingdom has adopted the General Data Protection Regulation (GDPR) - which will remain in force even after the nation has left the European Union - which essentially confers users with ownership rights over their personal data.

Companies like Facebook now need to ask for user authorization before they can use their personal data. The BoE is likely to hold any currency issued by centralized companies such as Facebook - which saw its reputation drop during the Cambridge Analytica scandal - with the same data confidentiality standards as a future CBDC.

"CBDCs should be designed to comply with these [data privacy] regulations, at the same time we want to ensure that users of a CBDC can be confident of the privacy of their payments and what data is shared, on what bases and with whom "Dyson said Tuesday.