https://bankofenglandfutureforum.co.uk/post/720090
stevegolf
3 days ago
Will independent currencies be allowed to coexist? For example cryptocurrencies.
Will independent currencies be allowed to coexist? For example cryptocurrencies.
Jon Cunliffe
22 hours ago
Over the centuries many things have been used as money in different societies and we have learned that for an economy to prosper it is vital that people have trust in the money they use - that it will be accepted when they us it to buy things, that they can store their wealth in it, and that its value is stable. Ensuring trust in the national currency is the core function of the Bank of England. We do this through monetary policy, which keeps the value of our money stable. We do it through our supervision of the banking and payment systems, which makes sure people's money is safe. And we do it through the cash we issue. Technology has changed the way we use money dramatically over the last 30 years and will continue to do so. We are constantly thinking about how technology has changed and will change the way we use money and how we can maintain trust in money and support innovation.
As I argued in my speech earlier this year that I think it’s unlikely that cryptoassets will become widely used alongside traditional currencies any time soon. Cryptocurrencies don't meet any of the tests above well. Nobody stands behind them. They’re not widely accepted in transactions and their value is very volatile so they are not a good store of value, which means that no-one uses them as a unit of account. There are also significant barriers to them becoming more widely used in the long term – for example, existing cryptoasset platforms have limited capacity and cannot handle more than a fraction of the payment volumes that are handled by traditional payment systems (such as Visa, Bacs or Faster Payments) every day.
In terms of the regulation of cryptoassets, the Bank of England has been involved in a joint project with the Financial Conduct Authority and HM Treasury. You can see the final report of the Cryptoasset Taskforce at the link below (Chapter 5 covers the actions that the three authorities will be taking). But there are no plans to make cryptoassets illegal.
https://assets.publishing.service.gov.uk/gove...t_final_web.pdf
Over the centuries many things have been used as money in different societies and we have learned that for an economy to prosper it is vital that people have trust in the money they use - that it will be accepted when they us it to buy things, that they can store their wealth in it, and that its value is stable. Ensuring trust in the national currency is the core function of the Bank of England. We do this through monetary policy, which keeps the value of our money stable. We do it through our supervision of the banking and payment systems, which makes sure people's money is safe. And we do it through the cash we issue. Technology has changed the way we use money dramatically over the last 30 years and will continue to do so. We are constantly thinking about how technology has changed and will change the way we use money and how we can maintain trust in money and support innovation.
As I argued in my speech earlier this year that I think it’s unlikely that cryptoassets will become widely used alongside traditional currencies any time soon. Cryptocurrencies don't meet any of the tests above well. Nobody stands behind them. They’re not widely accepted in transactions and their value is very volatile so they are not a good store of value, which means that no-one uses them as a unit of account. There are also significant barriers to them becoming more widely used in the long term – for example, existing cryptoasset platforms have limited capacity and cannot handle more than a fraction of the payment volumes that are handled by traditional payment systems (such as Visa, Bacs or Faster Payments) every day.
In terms of the regulation of cryptoassets, the Bank of England has been involved in a joint project with the Financial Conduct Authority and HM Treasury. You can see the final report of the Cryptoasset Taskforce at the link below (Chapter 5 covers the actions that the three authorities will be taking). But there are no plans to make cryptoassets illegal.
https://assets.publishing.service.gov.uk/gove...t_final_web.pdf
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Translation: with the blockchain technology no bank will be allowed to create any more a deposit out of thin air, and the mismatch in bank accounting for money creation - i.e. the fact that new money is NOT accounted for as an inflow in the cash flow account of the bank BUT it is accounted as an outflow when we credit the customer A/c, thus hiding the profits from capital creation - can no more be hidden from the public. So we choose not to forbid outright the use of cryptocurrency but we do our best to discourage the public by boycotting the exchange between fiat and cryptos. Establishing a monetary cadastre visible to the public is not in our best interest because it will exposes all our shenanigans to transfer wealth from poor subjects to the sovereigns of our choice.
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