BOE: Banks Don’t Get Protection From Digital Currencies

Bank of England Deputy Governor Jon Cunliffe said it isn’t his job to shield banks from the coming shift to digital currencies, Reuters reported.

The shift could drastically change how customers feel about having physical money stored in banks, according to the report. The BoE is among the global regulators looking at how to deal with digital currencies, which have become more of a clear prospect for the near future as the pandemic keeps people away from physical spaces.

Cunliffe said it isn’t the BoE’s job “to protect bank business models,” Reuters reported.

Andrew Bailey, governor of the BoE, said over the summer that the BoE is closely examining how the idea of a digital currency would work. He said it has “huge implications” on payments as well as the general way society would operate.

Those comments came about six months after other BoE comments saying that it planned to lead a group alongside top global banks to explore numerous concerns with issuing the currencies. The BoE has also been involved in a panel along with Bank of Canada, Bank of Japan, European Central Bank (ECB), Sveriges Riksbank and Swiss National Bank, as well as the Bank for International Settlements (BIS), which is looking into the various ins and outs of the currency, including economic, functional and technological design choices, along with cross-border specifications.

Later in the summer, the BoE hired IT firm Accenture to revamp and revitalize its Real-Time Gross Settlements (RTGS) service, which handles daily transactions for financial institutions. The press release for that undertaking made no mention of digital currency specifically, although Victoria Cleland, executive director for banking, payments and innovation at the BoE, said at the time that it would help keep the U.K. at the cutting edge of payments innovation.