Bank of England Governor: Open to the Idea of a Central Bank Digital Currency

The Governor of the Bank of England Mark Carney said at the Riksbank Anniversary conference that he was open-minded about the prospect of a central bank digital currency (CBDC), Bloomberg reports May 25. Riksbank is the central bank of Sweden.

While he reportedly is not opposed to the idea of implementing a CBDC, Carney stressed that any such adoption of a digital currency would not happen soon. The UK central bank governor stated that cryptocurrencies do not currently constitute money. 

In February of this year, Carney sharply criticized cryptocurrency at an event at London’s Regent’s University, saying that, “It [cryptocurrency] has pretty much failed thus far on... the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange."

Earlier this month, the Bank of England issued a working paper, laying out various scenarios of possible financial risks and instability issues of using a CBDC. The report found that in the scenarios described, there was no reason to believe that adopting a CBDC would negatively impact private credit or total liquidity provision to the economy.

At the 350th anniversary of Riksbank on May 25, Carney stressed that the “past, present, and future” of central banks have and do depend on maintaining public trust in the financial system. He added that, since Brexit, the Bank of England has overhauled their financial system which would make it more resilient to shocks such as those following the brinkmanship of events like Brexit.

Other central banks in Europe have also considered adopting a CBDC. Earlier this month, Norwegian central bank Norges Bank issued a working paper in which they consider developing a CBDC as a supplement to cash to “ensure confidence in money and the monetary system.” The aforementioned Riksbank is also considering an e-krona as the use of banknotes and coins declines in Sweden.