July 10, 2023 - 6:45pm
The introduction of a retail central bank digital currency (CBDC) would be “a major step” for the British economy, Bank of England Governor Andrew Bailey said in a speech tonight. At the annual Mansion House dinner, at which Chancellor Jeremy Hunt also made an address, Bailey nonetheless stressed that the Bank of England “will continue to produce banknotes” and that far from moving to an entirely digitised system, “cash is here to stay”.
Bailey and his counterparts at the Treasury floated the idea of a digital pound in February of this year, and the following month Bank of England Deputy Governor Sir Jon Cunliffe claimed that the introduction of a British CBDC is “likely”. Since then, there has been widespread concern expressed about the surveillance and censorship possibilities a digital currency might bring, while last week financial services minister Andrew Griffith warned that “we should proceed cautiously”, given potential issues with privacy.
The Governor’s speech went on to refer to Bitcoin as “highly volatile and best treated as an extremely speculative investment”, as well as having “no intrinsic value”. Meanwhile, stablecoins, cryptocurrencies pegged to an asset such as gold or fiat, are, in Bailey’s words, “not robust and, as currently organised, do not meet the standards we expect of safe money in the financial system”. Both unbacked cryptocurrency, Bitcoin being the most prominent example, and stablecoins “are not money,” he said.
“The Chancellor and I have always been clear that the introduction of a retail CBDC would be a major step,” Bailey said, “and that there should be a public debate about the future of money in the UK.” He acknowledged that, while some of the public response has been positive, indicating that “retail CBDC can be a real breakthrough in the world of digitalisation”, other people and bodies have raised concerns “about a desire by the authorities to reach into people’s privacy”. Such a move “is absolutely at odds with what we should do, and indeed would”.
Nonetheless, he said, “under the new Financial Services and Markets Act, the Bank of England and FCA will have new powers to ensure the future effectiveness, resilience, and sustainability of the cash system,” adding, “cash is here to stay.”
Bailey, who has served in his role since 2020 when he succeeded Mark Carney, has been vocal about the possibilities of digital currencies throughout his time at Threadneedle Street. In November 2021 he gave evidence at the Economic Affairs Committee in Parliament, claiming that a CBDC would provide a better alternative to stablecoins with “money-like features which could be regulated”. A year previously, he also criticised stablecoins at a European Central Bank panel.
China has come closest to fully implementing a CBDC, moving towards incorporating the digital yuan within its domestic financial system. If fully realised, it has been touted as a possible challenge to the US dollar in the international markets. That it is China, with its authoritarian government and alleged human rights abuses, pioneering the currency has highlighted the possibility that a prospective digital pound would be used to limit privacy and freedom.
In his Mansion House speech, the Bank of England Governor concluded that “what the history of the City suggests is that there is a great capacity to move on from past successes and seize the opportunity to get out in front again. We have that opportunity again with the digital world, but we need to take it.”
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SubscribeHe’s wrong by the way. The current fiat currencies have no real value. In a labor centric world how much it takes to make something is the value. It takes work to mine a bitcoin. Also, if gold backing your currency is so bad, why are so many central banks around the world loading up on it?
If we get CBDCs say goodbye to any privacy. Everything you buy is traceable back to you, and so if the government determines that you have eaten too much beef, gone past your carbon limit, shared fake medical news, or some other thing they deem fake, you can have your money frozen at any moment, or perhaps have your travel or health pass denied. AI will probably monitor you, so you won’t even have a human to complain to.
Fight it by refusing to use it. Use physical money everywhere. Don’t let them take that from you.
I don’t know a lot about digital currency, but they can do all this stuff now, and they do and will continue to do it in the future. Just look at the truckers, multiple people being debanked today, pay pal, gofundme. The list goes on.
“In a labor centric world how much it takes to make something is the value”
This is the Marxist Labour Theory of Value, and it’s a load of rubbish.
As any novice chef or DIYer can tell you, hours of work don’t necessarily result in something of value. A bad labourer can destroy value.
Different things have served as money over the years. Cowrie shells, salt, silver, gold and now paper (or virtual paper). These all had value at various times because people believed they had value.
Certain inherent properties help: portable, fungible, non-corruptible, scarce.
Whenever commodities served as money, their value surpassed their natural value as commodities. The fact that they were in demand as money drove their value up.
Obviously paper money is only as scarce as the government chooses to make it, and the same would be true for their ridiculous CBDC. But as you note, CBDC comes with the added drawbacks of privacy invasion and programmability – nobody would freely choose money with strings attached.
I don’t know a lot about digital currency, but they can do all this stuff now, and they do and will continue to do it in the future. Just look at the truckers, multiple people being debanked today, pay pal, gofundme. The list goes on.
“In a labor centric world how much it takes to make something is the value”
This is the Marxist Labour Theory of Value, and it’s a load of rubbish.
As any novice chef or DIYer can tell you, hours of work don’t necessarily result in something of value. A bad labourer can destroy value.
Different things have served as money over the years. Cowrie shells, salt, silver, gold and now paper (or virtual paper). These all had value at various times because people believed they had value.
Certain inherent properties help: portable, fungible, non-corruptible, scarce.
Whenever commodities served as money, their value surpassed their natural value as commodities. The fact that they were in demand as money drove their value up.
Obviously paper money is only as scarce as the government chooses to make it, and the same would be true for their ridiculous CBDC. But as you note, CBDC comes with the added drawbacks of privacy invasion and programmability – nobody would freely choose money with strings attached.
He’s wrong by the way. The current fiat currencies have no real value. In a labor centric world how much it takes to make something is the value. It takes work to mine a bitcoin. Also, if gold backing your currency is so bad, why are so many central banks around the world loading up on it?
If we get CBDCs say goodbye to any privacy. Everything you buy is traceable back to you, and so if the government determines that you have eaten too much beef, gone past your carbon limit, shared fake medical news, or some other thing they deem fake, you can have your money frozen at any moment, or perhaps have your travel or health pass denied. AI will probably monitor you, so you won’t even have a human to complain to.
Fight it by refusing to use it. Use physical money everywhere. Don’t let them take that from you.
“Bank of England: digital currency will be a ‘step forward’”
Forward to what?
I assume that the government will then be able to view all our transactions at the press of a button. And will be able to “haircut” our accounts whenever it has blown its crediblity on the money markets
“Bank of England: digital currency will be a ‘step forward’”
Forward to what?
I assume that the government will then be able to view all our transactions at the press of a button. And will be able to “haircut” our accounts whenever it has blown its crediblity on the money markets
I can see little in this article about any perceived benefits of a national digital currency. I haven’t read anywhere (yet) about benefits for the majority of the population.
Am I missing something?
What are the hoped for benefits of a digital currency “owned” by the BoE?
I can see little in this article about any perceived benefits of a national digital currency. I haven’t read anywhere (yet) about benefits for the majority of the population.
Am I missing something?
What are the hoped for benefits of a digital currency “owned” by the BoE?
No thanks!
No thanks!
The only DC that interests me is the BRICS gold backed currency purportedly coming in August.
That will probably be banned in the West, if they don’t like bitcoin, they sure as shit won’t like a BRICS Gold backed DC
They won’t be able to stop the flows without capital controls. As soon as they do that it’s game.over in terms of showing their piss poor hand. But above that, .idthe Global South wanta ayment in gold backed currncy they’ll have to embrace it themselves. Most Central.Banks have been stocking.up on gold over past 5 years. They fully understand wat’s going to happenthrough the financial reset.
If CBDCs are mandated I brlieve carry products and barter will do very well.
Yes, v likely. But as the BRICS bank can’t be forced to reveal account holders I can see alot of investors/traders using it, especially if they issue a bond of some kind.Like Germany for example haha
They won’t be able to stop the flows without capital controls. As soon as they do that it’s game.over in terms of showing their piss poor hand. But above that, .idthe Global South wanta ayment in gold backed currncy they’ll have to embrace it themselves. Most Central.Banks have been stocking.up on gold over past 5 years. They fully understand wat’s going to happenthrough the financial reset.
If CBDCs are mandated I brlieve carry products and barter will do very well.
Yes, v likely. But as the BRICS bank can’t be forced to reveal account holders I can see alot of investors/traders using it, especially if they issue a bond of some kind.Like Germany for example haha
That will probably be banned in the West, if they don’t like bitcoin, they sure as shit won’t like a BRICS Gold backed DC
The only DC that interests me is the BRICS gold backed currency purportedly coming in August.
“cash is here to stay”
“three weeks to flatten the curve”
“cash is here to stay”
“three weeks to flatten the curve”