Bank of England predicts falling profits for banks if Britcoin is introduced

The House of Lords Committee of the UK Parliament heard from the heads of the largest UK banks, including the head of the Bank of England Andrew Bailey, about the prospects for the introduction of Britcoin – the digital currency of the central bank (CBDC).



Bailey said the introduction of an official digital currency could hit banking businesses by cutting commercial deposits by about 20% through faster payments and lower transaction fees. “Banks will need to adapt – said the Deputy Head of the Central Bank for Financial Stability Jon Cunliffe. – They will lose their stream of income from payments. “

Andrew Bailey reacted negatively to the launch of sterling pegged stablecoins as an alternative to Britcoin due to their potential volatility. “They are called stablecoins, but I would put the word” stable “in quotes,” – he said. – 95% of the cryptocurrency is not backed by anything, and the remaining 5% are stablecoins, some of which are simply more stable than others. “

Earlier this month, the Bank of England announced plans to consult on its own CBDC. He is one of several central banks that are exploring the possibility of using CBDC. China has decided to accelerate the launch of the digital yuan in time for the 2022 Beijing Winter Olympics, and the Bahamas and Nigeria have already launched their own government digital currencies, Sand Dollar and eNaira, respectively.

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Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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