BoE Governor Questions The Need For A Digital Pound Sterling
Andrew Bailey, the Governor of the Bank of England, has voiced his dissatisfaction with the country’s push for a CBDC. The governor expressed his doubts about the necessity of a digital Pound.
His statement came after finance ministers from countries within the Eurozone supported continuing efforts toward developing a digital Euro.
CBDC Development In The Eurozone
Bailey argued that the UK already has a recently upgraded wholesale money settlement system operated by the central bank. Hence, he saw no need for a wholesale CBDC.
Meanwhile, the governor assured retailers that the bank would not abolish cash for retail use. According to him, retail payments do not have to change currently.
“Before becoming overly excited about the technology and concept, we must identify the specific problem we are attempting to address clearly,” Bailey said.
Notably, Bailey’s remarks come in the wake of the recent CBDC developments in the Eurozone. Besides, a former advisor of the BoE raised the alarm on the expenses and potential risks of launching a CBDC.
On January 16th, ministers of finance from different countries in the Eurozone showed massive support for the ECB’s digital Euro project.
Meanwhile, the Eurogroup acknowledged that introducing a CBDC needs more political discussion. Additionally, they brought attention to the problems they’ve observed, such as financial stability, privacy concerns, environmental impacts, and other matters.
The same day, Tony Yates, a former advisor for the BoE, stated in a recent interview that CBDCs are expensive and risky. Hence, launching a CBDC is not worth it.
Russia And Iran Partner To Launch Gold-backed Stablecoin
Furthermore, Yates expressed skepticism about the reasons behind the creation of CBDCs, referring to them as dubious. Meanwhile, countries like Nigeria are still struggling to increase the adoption of the eNaira.
Despite numerous attempts by Nigeria’s central bank to increase adoption, people prefer to use cryptocurrencies like BTC and USDT.
In other related development, recent reports reveal that Russia and Iran are working towards launching a gold-backed stablecoin. According to the announcement, the token will help to facilitate cross-border transactions.
Alexander Brazhnikov, the Exec Director of the Russian Association of Crypto and Blockchain, said the stablecoin would be backed by gold. Instead of using fiat currencies such as the USD, the Iranian Rial, or the Russian Ruble, entities in Russia and Iran will use the stablecoin for cross-border transactions.
Furthermore, the news report stated that the proposed stablecoin would function within a special economic zone in Astrakhan. Presently, Russia has begun accepting cargo shipments from Iran in Astrakhan.
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