IBT: Bank of England cautious about blockchain

posted almost 6 years ago
It was billed as the possible advent of "Britcoin", or central bank-issued digital currency, but the Bank of England took a rather cautious approach when giving evidence about the potential of blockchain technology in the House of Lords.

Giving evidence first, Dr Ben Broadbent, deputy governor, Monetary Policy, Bank of England, stated that digital central bank currency was far off in the future, adding that such a thing would face not just technology barriers but would also be a question of policy, since it would involve a significant restructuring of the financial system.

Broadbent said it would be very nice to have a system where all deposits have a fixed value that you can move around instantaneously, but banks would then be obliged to hold equal amounts of very liquid assets.

Debate turned to the question of how blockchains could optimise the post trade clearing and settlement arena. The House wanted to know if settling securities in this way constituted systemic risks. Broadbent said: "It's not clear to me that this technology would make risks that already exist today any worse. There are different aspects to consider, but there are some parts which may make the system more robust."
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