Crypto-Sterling: Bank of England Is Considering Digital Pound

The Bank of England has established a research group that is looking into the possibility of releasing a cryptocurrency backed by the Pound Sterling.

We’ve seen the crypto-ruble, then the crypto-shekel. Now, Britain wants its own crypto-sterling to compete with high-street banks in the country.

The Bank of England reportedly set up a research group with the intention of determining the impact of releasing a cryptocurrency tied to the pound sterling.

The group told the Telegraph that it would report back later this year with its findings.

With a crypto-sterling, UK citizens will be able to digitize their cashflow entirely rather than relying on brick and mortar banks for their transactions.

It appears that Bitcoin’s skyrocketing price throughout the last year has attracted the attention of central banks around the world, and now they are considering releasing their own cryptocurrencies to compete with the decentralized heavyweight.

Since the Bank of England’s cryptocurrency would be tied to the sterling, it won’t be subject to the same roller coaster rides of volatility that have plagued Bitcoin since it appeared on the scene.

The idea of a crypto-sterling isn’t all rosy to everyone in the Bank of England, however.

Mark Carney, Governor of the Bank of England, has concerns about releasing the cryptocurrency to the general public for common use.

“You [could] create a situation where you can have an instantaneous [bank] run. So as soon as there were any concern, people can switch in their account at the Bank of England,” he said.

“There are many talents of the Bank of England, but I think credit allocation across the entire economy would not be a good idea. So there are some fundamental problems if you push the retail design all the way down, unless you restrict the amount that people have,” he later added.

The United Kingdom isn’t the only country thinking about introducing its own cryptocurrency.

At the end of December, an official from the Finance Ministry of Israel said that they are considering issuing a crypto-shekel with reasoning very similar to that of the Bank of England.