Analysts of Bank of England (BoE) think private companies can play a part in the issuance of cryptocurrency and distribution of money. But it is wondering that BoE itself is playing a role of duel speaker like once it is saying cryptocurrencies don’t meet the necessary criteria to be considered money and again it is encouraging private companies to issue cryptocurrency.
But BoE refuted the answer that cryptocurrency isn’t equivalent to money yet but that doesn’t mean it’s impossible for somebody to improve upon that technology and create something that much better fulfills the qualities of money. They have seen crypto-friendly proposals from large technology firms.
It is expected that private currencies could reportedly work alongside any future CBDC initiative if they offered real utility. Facebook-led libra plan is expected to build a stablecoin based on a basket of fiat currencies. Libra has seen some pushback from regulators and politicians around the world.
On the off chance, the real need comes out and existing system becomes failure to serve fully hopefully there may be a role to play for the public sector as well as private sector in addressing some of the need.
The viewpoint of BoE over private cryptocurrencies outdistances other central banks. The motivation for researching CBDCs was reportedly to counter private currencies, such as libra, that could exist outside U.S. regulation. French and German officials think libra to be illegal in their jurisdictions. Governor of Canadian Central Bank expressed it would issue a CBDC in order to compete against a potential threat like libra.
BoE has been always appreciable about libra since its launch because they think it’s intriguing. But BoE is always strict about maintaining tight data privacy standards.
Make Sure Privacy
The adoption of General Data Protection Regulation (GDPR) by the U.K. essentially gives users ownership rights over their own personal data. Companies now have to seek user permission before using someone’s personal data. It is likely to BoE would hold any currency issued by centralized firms to the same data privacy standards as a prospective CBDC. CBDCs must be designed complying with data privacy regulations and also they want to ensure that the users of CBDCs can be confident that privacy in their payments. CBDC can be anonymous but it should bear proper privacy for its users and people must have control over their data.