Reuters/Christinne Muschi
- A group of central banks will study use cases for digital currencies and whether they should issue their own in their home jurisdictions, the Bank of England said in a Tuesday release.
- The central banks of Britain, Japan, the European Union, Sweden, and Switzerland will work alongside the Bank of International Settlements to share experience and study the potential of central bank digital currencies.
- Such currencies would remain under the central banks’ purview, and not exist as mineable cryptocurrencies that previously dominated the digital-currency conversation.
- Visit the Business Insider homepage for more stories.
Central banks around the world are collaborating on a study of digital currencies and their potential uses, the Bank of England said in a Tuesday statement.
The institutions of Britain, Japan, the European Union, Sweden, and Switzerland will cooperate with the Bank of International Settlements to share knowledge as they assess use cases for central bank digital currency, according to the release.
The team of banks will “assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies,” the group said.
Such currencies would be issued by the central banks, and not exist as mineable cryptocurrencies that previously dominated the digital-currency landscape. Cryptocurrencies tout decentralization as a key benefit, and central bank digital currencies would remain under the purview of each nation’s monetary institution. Yet both coins would use blockchain technology to record transactions.
China has already announced plans to create its own digital currency, but has been slow to release additional information on the project.
The announcement follows the delayed rollout for Facebook’s Libra currency. The coin is projected to be released in 2020, though the company noted in July that the digital currency wouldn’t be released until US regulators’ concerns are sufficiently addressed.
Bank of England Governor Mark Carney hinted at the collaborative study in a speech last year, criticizing global reliance on the US dollar and suggesting central banks would soon need a separate reserve currency, according to Reuters. One solution would involve a financial system employing central bank digital currency, Carney said.
Now read more markets coverage from Markets Insider and Business Insider: