Andrew Bailey, Governor of the Bank of England (BoE), expressed skepticism about the need to adopt a digital libra shortly after finance ministers from eurozone countries offered support for the development of a digital euro.
The Governor of the Bank of England recently questioned the real need for a wholesale central bank digital currency (CBDC), saying that a “comprehensive central bank money settlement system with a major update” already exists.
In addition, Bailey also expressed that there are no plans to cancel retail cash. The BoE governor doesn’t think retail payments need to change right now. It is to explain:
“We need to be very clear about the problem we’re trying to solve here before we get carried away with the technology and the idea itself.”
Bailey’s comments follow the announcement of new developments in central bank currencies in the eurozone and recent comments by a former Bank of England adviser on the costs and risks of creating a central bank digital currency.
On January 16, the finance ministers of the eurozone countries published a statement supporting the possible further development of a digital euro led by the European Central Bank. The Eurogroup has acknowledged that introducing a central bank digital currency requires further discussion at the political level. In addition, the group highlighted issues it was looking into, including environmental impacts, privacy, financial stability, and other issues.
On the same day, Tony Yates, a former Bank of England advisor, argued in an opinion piece published in the Financial Times that the costs and risks associated with developing CBDCs are not worth it. Additionally, Yates questioned the motives behind the creation of CBDCs, calling them “suspicious.”
Meanwhile, Iran and Russia are considering creating a new gold-backed stable currency. According to a report by the Russian news agency Vedomosti, Iran is cooperating with Russia to create a so-called “Persian Gulf region code” for use in cross-border transactions.