Andrew Bailey, Governor of the Bank of England (BoE), was skeptical about the need for a digital sterling shortly after the finance ministers of the eurozone countries endorsed further work on a digital euro.
The BoE governor recently questioned the need for a wholesale central bank digital currency (CBDC), citing that a “wholesale central bank money settlement system” already exists. with a major update.”
Also, Bailey also expressed that there are no plans to abolish cash when it comes to retail use. BoE governor doesn’t think retail payments need to change at the moment. He explained:
“We have to be very clear about what problem we are trying to solve here before we get carried away with the technology and the idea.”
Bailey’s comments come on the heels of new CBDC developments in the eurozone and recent comments by a former BoE adviser about the costs and risks of creating a CBDC..
On January 16, the finance ministers of the eurozone countries published a statement in which they supported the continuation of work on a possible digital euro being studied by the European Central Bank. The Eurogroup recognized that the introduction of a CBDC requires further discussion at the political level. In addition, the group highlighted issues it was looking at, including environmental effects, privacy, financial stability, and other issues.
The same day, Tony Yates, a former adviser to the Bank of England, said in an opinion piece published in the Financial Times that the costs and risks associated with developing CBDCs are not worth it.. Furthermore, Yates questioned the motivations behind the creation of CBDCs, calling them “suspicious.”
For his part, Iran and Russia are studying the creation of a new gold-backed stablecoin. According to a report by the Russian news agency Vedomosti, Iran is collaborating with Russia to create a so-called “Persian Gulf region token” to enable cross-border transactions..
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