The Bank of England is one of the first pioneers when it comes to Central bank digital currency (CBDC). United Kingdom’s central monetary authority started officially discussing CBDCs as far as 2015 during a speech held by chief economist Andy Haldane regarding the use of mechanisms to implement negative interest rates.
After five years of carefully developing its cryptocurrency and blockchain agenda, the Bank of England plans to attend a key forum yet again tomorrow, focusing on the adoption of CBDCs.
The Official Monetary and Financial Institutions Forum (OMFIF) hosts a virtual panel on Wednesday. Several key figures in the DeFi, fintech, and banking industry will attend it as speakers. Among them are:
- Swiss National Bank Governing Board member – Thomas Moser
- Chief Digital Officer of Magyar Nemzeti Bank – Aniko Szombati
- Senior Fintech Specialist at the Bank of England – Simon Scorer
- IT Team Manager ING Nederland – Cees van Wijk
- Cypherium CEO – Sky Guo
Panel emphasizes how to implement CBDCs, not when
The panel’s description notes that there is much debate regarding which technological infrastructure would be best to use for CBDCs. The technology offers several great features such as transparency and tokenization. The question remains whether blockchain networks are powerful enough to handle modern financial uses. How far privacy, scalability, and interoperability can go is still up for debate.
Amongst the discussion, the speakers will contend how Central bank digital currency could benefit from the adoption of blockchain technology. The panel will layout DLT infrastructure design and how it can interact with currently existing legacy systems. Another critical point is the use of smart contracts and their ability to provide interoperability between effectively any blockchain network.
According to one of the speakers, Cypherium CEO Sky Guo, the perfect time to discuss CBDCs is now, while they are still only theoretical.
“With CBDCs still in their initial phase of conception, now is the time to debate the advantages and disadvantages of infrastructural ideas, especially related to how these instruments will interact and operate with each other.” – Sky Guo
Speakers to reveal their institution’s CBDC research
Attended by various members from monetary institutions such as the Bank of England, the Swiss National Bank, and the Magyar Nemzeti Bank, each speaker will reveal what their institutions discovered while researching CBDCs.
The OMFIF states that pressure from private companies forced Central Banks to make a move and seriously consider digital assets. Their research evaluates that 80% of central monetary authorities felt pressure from the private sector.
Most notably, Facebook’s Mark Zuckerberg came to the financial spotlight when he announced Libra last year. The CEO of the internet’s most widely used social network dealt with severe scrutiny from business experts and institutions from all over the world.
The event does not come as a surprise as most cryptocurrencies and blockchain network represent a private platform. The only way to regulate them and modify them to traditional financial standards is to ban them or pressure developers.
Bank of England focuses on CBDCs even in 2020
There is still room for growth as both enthusiasts and developers expect a steady but inevitable rise in the adoption of DeFi this decade. The Bank of England has already published a research piece this year in March, which analyzed the role of CBDCs to assist Central Banks with monetary stability.
However, some leading financial experts have still abandoned private cryptocurrencies. Andrew Bailey, who became governor of the BoE this year, briefly shared his view on private cryptocurrencies. He warned crypto investors to stay away from Bitcoin and prepare to lose all their money if they invest.