The central bank of the United Kingdom shared its future prediction of the role of CBDCs & stablecoins and noted that both types of currencies may co-exist.
In the present time, the majority of the Central Banks are working on their national Central Bank Digital Currency (CBDCs). On 7 Feb 2023, the Bank of England (BoE) and His Majesty’s Treasury released a 116-page consultation paper on CBDC, which means the Bank of England is very near to developing & launching its national CBDC or say, Digital Pound.
Through the released consultation paper, the Bank of England (BoE) noted that CBDCs & private currencies e.g stablecoins may play collaborative roles in the mixed payment economy.
“In much the same way that cash exists alongside private money, the digital pound does not need to be a dominant form of money to meet its public policy objectives. The digital pound could exist alongside other forms of money, including stablecoins.”
According to the released consultation paper, BoE will complete its work on digital Pound (e-GBP) by 2025 but they are sceptical about the official launch plan of CBDC. And the main reason behind such unconfirmed plans is the impact of CBDC on the traditional payment system.
According to BoE & His Majesty, CBDC is required to ensure the confidence & safety of the payment system alongside promoting innovation, choice, and efficiency in domestic payment.
Further consultation noted that the adoption of the digital pound will also play an important role to bring confidence among the citizens and it will be possible with the contribution of private sector companies’ involvement to support Digital Pound payment via the API system.
According to experts’ points of view, BoE is looking to develop its CBDC more likely to stablecoins but is not sure about the future whether people will support it as a better payment option or not.
Recently the Nigerian Central Bank noted that its CBDC adoption rate was only 0.5% in the last 12 months of time frame, which means the country failed with its CBDC plan.
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