The Bank of England will not protect the private banks from the Digital euro as the Deputy Governor of the Bank said in a seminar-“Our job is not to protect bank business models.” More on this topic, we read in today’s crypto latest news.
Experts warned that the widespread adoption of CBDCs will negatively impact the commercial banks but the Bank of England says that’s not its problem. The private banks should not expect that the BOE will protect them from the consequences that will emerge from digital currency adoption. Jon Cunliffe, the Deputy Governor of The Bank of England said:
“Our job is not to protect bank business models. Banks will have to adjust. Our job is to ensure that if bank business models change, we manage the financial and macroeconomic consequences of that.”
As a rebuke from Cunliffe, to the banks that expect some sort of mediation on the part of the BOE, some banks even warned that as central bank digital currencies are implemented across the world, they could have adverse effects on commercial banks by depriving them of stable sources of funding. The bank of England was demonstrating real interest in the past year in developing their own CBDC while in June, the BOE established a digital currency task force with the Bank of Canada, the European Central Bank, the Bank of Japan, the Sveriges Riksbank, the Bank of International Settlements and the Swiss National Bank. The goal was to assess potential CBDC use cases as well as to consider design choices for developing technologies.
While it seems to be in favor of the CBDCS, the Bank of England will not remain optimistic when it comes to Bitcoin. Last month, the governor Andrew Bailey said that it was quite hard for him to see BTC as a real method of payment. Bailey also issued warnings against Bitcoin in the past:
“If you want to invest in Bitcoin, be prepared to lose all your money.”
Cunliffe on the other hand said that politicians too will have to start focusing on CBDCs. They will have to go up to the political agenda fast before the political side discovers that there are developments in the private sector that will not fit with policies. Like it or not, the commercial banks could need to brace for the arrival of the state-operated digital currencies while CBDCs remain a focal point for central banks around the world with more than 80% interested in developing their own.
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