Sunday 23 February 2020 12:57 pm

Bank of England chief cashier indicates backing for official digital currency

The Bank of England’s chief cashier has indicated support for an official digital currency, saying it is “crucial” for central banks to consider entering the market before it becomes dominated by tech giants. 

Sarah John, who is responsible for issuing banknotes, said it was “really important” for central banks to consider digital currencies “as an option”. 

Read more: Bank of England forms group to weigh up digital currency launch

Central banks have come under pressure to take action amid the controversy surrounding Libra, Facebook’s planned digital currency. Regulators and politicians have raised concerns that the currency could be used for money laundering and could destabilise the global financial system. 

“We need to think as an institution about how to position ourselves to make sure society still has a broad range of payments that it can use with confidence,” John told the Telegraph.

“It is absolutely right that central banks think about whether a public sector or private sector would be best to provide a digital currency going forward.” she added.

Last month, the BoE teamed up with several of its peers to assess the case for launching their own digital currencies, fueling speculation that central banks were seeking to limit the possible influence of Facebook Libra. 

In total, 18 central banks globally are now developing some form of sovereign digital currency, and the Financial Stability Board has said authorities must “quicken the pace” of development regulation for the asset class. 

John said it was “so crucial” to strike the right balance on public sector involvement in digital currencies, and urged the BoE to position itself to ensure monetary and financial stability. 

Read more: Most people don’t trust big tech companies to issue digital currencies, survey finds

Her comments follow a survey earlier this month which showed that the majority of people across the world don’t think tech giants can be trusted to issue digital currencies. 

Central banks were found to be the institutions most trusted by the public to develop the currencies, with the backing of 51 per cent of respondents.