### Bank of England’s Deputy Governor Sir Jon Cunliffe, spoke to the Treasury Committee about the merits of a central bank digital currency (CBDC). Some committee members supported a BoE-backed CBDC, but others warned against uncontrolled crypto asset speculation.

Cunliffe emphasized that CBDCs have advantages for financial stability since they offer a different, more resilient payment method. He then declared his willingness to investigate the Bank of England's adoption of a CBDC or some other kind of stablecoin. However, the deputy governor added that the Bank of England lacked sufficient knowledge, thus the UK was not yet prepared to issue a CBDC.



Cunliffe also expressed his disappointment at the slow innovation seen from the traditional financial sector, particularly when it comes to assisting the unbanked. He believes that the financial sector needs to work harder to address financial inclusion, and that a CBDC could be one way to do this.



The crypto community has a strong suspicion of CBDCs since they deliberately pursue decentralization in the opposite direction of Bitcoin. Bitcoin functions without a central authority or middlemen, in contrast to CBDCs, which are centralized.



While the idea of a CBDC is still in its early stages, it is clear that there are both benefits and drawbacks to consider. On the one hand, a CBDC could provide greater financial stability and assist in financial inclusion efforts. On the other hand, there are concerns about the centralized nature of a CBDC and how it could impact the broader crypto asset industry.



As Cunliffe highlighted, the UK is not yet ready to issue a CBDC, but it is important for policymakers to continue exploring the potential benefits and drawbacks of this emerging technology. With innovation in the financial sector continuing at a rapid pace, it will be interesting to see how the conversation around CBDCs evolves in the coming years.



 

Bank of England’s Deputy Governor Sir Jon Cunlifee, spoke to the Treasury Committee about the merits of a central bank digital currency (CBDC). Some committee members supported a BoE-backed CBDC, but others warned against uncontrolled crypto asset speculation.

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