A Digital Currency Inspired By Bitcoin Could Be The New Year Reality Of Bank Of England
What do you do if you are in awe of the extreme potential of cryptos but just can’t mend its functionality with the certified risk parameters? Well, you imbibe the underlying Blockchain Technology and come up with a cryptocurrency of your own. With Venezuela having its Petro and Russia soon to be launching Cryptoruble, digital token enthusiasts worldwide are eagerly waiting for England to mark a bombastic beginning to 2018 with its exclusive cryptocurrency.
Mark Carney, the governor of Bank of England recently told a Treasury Select Committee before Christmas that he had held talks with other central banks about launching digital currency. The 52-year-old governor is the first person coming from non-Britain roots to hold such a position prior to which he had spent more than a decade working for Goldman Sachs.
This former Governor of the Bank of Canada had confirmed just a few days back that Bitcoin is slowly taking the shape of an “active area of interest.” He also displayed extreme interest in its principal mechanism of delivery and operating the decentralized distributed ledger. He revealed to British lawmakers that, “you don’t end up with those financial stability risks, you get financial stability benefits. And you save huge amounts of computational energy intensity.”
His statements prove that he was totally unperturbed about its retail potential. He even went on to describe the study conducted by Bank of England in regards to bitcoin as “pretty active in it but we’re also disciplined. If we’re going to apply something to the core of the system, it’s going to need to meet five sigma quality rating.”
Chief reporter of The Telegraph Robert Mendick penned down an article which made its readers believe that the three-hundred-year-old bank is investigating how to link the pound sterling with a state-backed cryptocurrency and has finally managed to reach the eureka moment. Mark Carney foreshadowed this scoop published in The Telegraph by concluding his announcement stating that, “What I say on this topic today will be outdated six months from now because things are moving so rapidly.”
The English daily had titled their coverage on the exciting topic of bitcoin as “The Bank of England could green light its own Bitcoin-style digital currency as early as 2018, The Telegraph can disclose.”
Meetings are being conducted at full force at the banking headquarters. This has made Mr. Carney confirm that, “I have participated in discussions with the major central banks on this issue” of a digital currency backed by the central banker. Bank of England had been running trial and error tests over summer on the blockchain technology to find out if it can actually be used to ease out settlements in between banks. Such tests yielded successful results. The bank governor had revealed to the Treasury Select Committee that, “the underlying technology is actually of a fair bit of interest. We are working with it at the Bank of England.”
Dr. George Danezis belonging to the University College London was commissioned by the Bank of England in last year’s spring for devising a cryptocurrency which could function as per regulation and in accordance with the backing of the state. This gave birth to RS Coin which increased the level of efficiency associated with the automation in banking functionality. Central Banks could establish easy control on the supply of money at a particular time frame and could also determine the total money in circulation.
Mr. Carney is optimistic about the digital token being used in between central banks. But The Telegraph has reported that a “research unit set up by the Bank is investigating the possible introduction of a cryptocurrency linked to sterling.” Thinking of a scenario wherein traditional retail banks allow the same to happen is really difficult to imagine since it might as well bring upon their downfall. Banking legacy simply cannot survive in a world where transacting of cars, houses and loans can be availed of simply by snapping fingers.
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Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.