The governor of the Bank of England has accused a Westminster committee of dismissing key arguments for the introduction of Britcoin.
Speaking at the Treasury Committee today, Andrew Bailey challenged a scathing report by the House of Lords’ Economics Affairs Committee which claimed there was “no convincing case” for the introduction of Britcoin, a digital version of the pound backed by the UK’s central bank.
Bailey said that the Bank of England should consider issuing its own digital currency to prevent commercial entities, planning to issue private digital currencies in the form of stablecoins, from taking over a key central bank monetary function.
“If Facebook were to decide to introduce a stablecoin, I think that would pose a very big challenge to the system,” said Bailey, pointing out that it might be more sensible for the Bank of England to create its own digital currency in order to retain oversight of the domestic payments system.
“The House of Lords rather dismissed that argument,” Bailey continued. “I would not dismiss that argument, to me that is central to what we are trying to solve.”
At today’s committee meeting Bailey was flanked by Jon Cunliffe, the deputy governor for financial stability at the Bank of England. Cunliffe added that legislators and regulators “should not ignore” the opportunities offered by crypto technologies, such as stablecoins and central bank digital currencies (CBDCs).
“Cross-border payments are 50 years out of date in terms of speed, reliability and cost,” Cunliffe said.
“We shouldn’t ignore the fact that Some of these new technologies, whether they are public sector through CBDC or private sector through stablecoin, if well regulated, offer a real opportunity to get the cost and speed down,” he added.
Cunliffe advocated extending existing regulatory regimes for financial services and assets to the crypto world in order to counter the economic stability risk posed by unbacked, unregulated digital assets.
According to Cunliffe HM Treasury will soon legislate to bring stablecoins within its regulatory ambit and said proposals could be forthcoming in the first half of 2022.