‘Stop Creating Private Money!’ : Should the Bank of England Introduce a Central Bank Digital Currency to Compete with Cryptocurrency? A Review of the UK Bank of England's Proposed Retail CBDC
Technology has changed the future of money. The need to foster innovation in banking has been instigated by a shift from traditional finance provided by incumbents to fintech companies, such as challenger banks and decentralised platforms, offering new forms of money and payments services. The Bank of England has responded to this shift with the exploration of a Central Bank Digital Currency (CBDC), which in its retail form, would give the public the opportunity for the first time to directly hold state central bank money. This CBDC proposal emerges in a landscape where private money such as cryptocurrencies are increasing in capacity of coins and in trading volume; in a crypto economy with an expanding market capital. This competition opens the possibilities to reform banking to adapt to new payments platforms such as blockchains with advanced features such as smart contracts. The proposed design of a CBDC can either compete or complement such innovations which is evaluated in this review article. I argue that the plethora of public and private currencies on the market, once reached legal maturity in terms of governance, can provide the element of choice to consumers in an open, innovative, and competitive free market. I put forward that the Bank of England must act to introduce a CBDC that is interoperable with innovative payment platforms including blockchains, accompanied by a user centric design, to participate in the ever-adapting fintech economy
Year of publication: |
[2022]
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Authors: | Coulter, Kelly-Ann |
Publisher: |
[S.l.] : SSRN |
Subject: | Großbritannien | United Kingdom | Geldpolitik | Monetary policy | Virtuelle Währung | Virtual currency | Zentralbank | Central bank | Elektronisches Geld | Electronic money |
Saved in:
freely available
Extent: | 1 Online-Ressource (22 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 7, 2022 erstellt |
Other identifiers: | 10.2139/ssrn.4078059 [DOI] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10013292642
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