Cryptocurrency (digital currency) could usher in a “new era” for central banks. At least that’s what Andrew Bailey, Governor of the Bank of England (Bank of England), who said at a conference organized by the Bank of England and the Bank that this “will be one of the” most important innovations in the history “of monetary institutions. for international settlements (BIS) on the occasion of the launch of the innovation center in London (BIS Innovation Hub). Around the world, central banks are exploring the idea of issuing digital currency: a dematerialized payment method that doesn’t necessarily go through banking.
Between protecting the privacy of users, the possible use of these currencies for criminal purposes or the impact of such innovations on the banking sector, the Bank of England, as well as the European Central Bank and the Reserve Federal Government have not yet decided whether the project will be successful. But monetary institutions are facing competition from China, where the digital yuan is already being tested in some cities, and decentralized cryptocurrencies.
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The week was marked by the decision of El Salvador, a small country in Central America, to accept Bitcoin as its official currency. “This is an interesting experience,” commented Benoit Queret, director of technological innovation at BRI on Friday, before adding: “We have made it clear that Bitcoin does not meet the conditions that should be considered a means of payment. “.
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Central banks are also wary of stablecoins, a means of payment that uses some technologies developed by free market cryptocurrencies such as bitcoins, but whose issuers claim to be backed by the currency.
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The Bank of England estimated on Monday that if these means of payment are democratized, they should be regulated with the same rigor as banking. One of the projects of most concern to regulators, Facebook-backed Diem, left Switzerland in mid-May and moved to the United States, where the association will focus on issuing a dollar-indexed cryptocurrency.