Bank of England deputy governor hinted at a possible central bank digital currency (CBDC) and the benefits of using stablecoin

In a speech, yesterday at the OMFIF Digital Currency Institute, London, Bank of England deputy governor Jon Cunliffe spoke about the growth of stablecoin and cryptocurrencies in general in the United Kingdom.

Bank of England deputy governor says stablecoin are moving away from public money

First, Cunliffe hinted at the possible launch of a central bank digital currency (CBDC) and the benefits of using stablecoins. He noted that such developments will lead to a further diversion away from cash.

Stablecoins are electronic money, priced 1:1 with fiat such as USD. Their value never changes and the use of blockchain allows for borderless money transfers.

And for Cunliffe, such technology could change the way money is transferred and shared with the public:

“There are, however, on the near horizon newer technologies and innovations, such as tokenization and distributed ledger, which may further transform the money we use. Stablecoins are probably the best known of these. Their proponents claim that these have the potential radically to reduce the costs of digital money and to increase its functionality and the things it can do.”

Cunliffe says that the proponents of these newer forms of money are not banks or financial institutions, but technology companies who are looking to integrate new forms of money into services. based on their other data.

He explained:

“This has attracted enormous attention, including from public authorities, like the Bank of England, who is now wrestling with the thorny question of what regulatory framework should apply to non-bank issuers of private money.”

However, that doesn’t mean paper money will be phased out any time soon:

“The Bank of England is committed to making physical cash, banknotes, available as long as there is demand for it and is working with other authorities to support continued access to cash.”

The deputy governor said the need for cash is unlikely to completely disappear anytime soon:

“Many still rely on it for a number of reasons.”

The stablecoin sector is now worth more than $95 billion and accounts for 4.07% of the entire crypto space. USD-based coins like Tether ($56 billion), USD Coin ($14 billion), and Binance USD ($7.8 billion) are the leaders, with the likes of TerraUSD ($2 billion) and Paxos ($1.1 billion) will catch up soon.

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