The UK’s Central Bank, the Bank of England abandoned plans to launch its own digital currency, the possibility of which was reported in December. This writes FTAdviser.
The representative of the Bank said that currently the regulator has no plans to launch its own cryptocurrency, but will continue to study this issue.
That research division of the Bank is considering the possibility of establishing associated with a pound of cryptocurrency, it became known in late December. The decision on this issue is expected to be available within 12 months.
The rejection of the initial plans associated with concerns about the fact that people can stop using commercial banks and go to the digital payment system of the Bank of England to transfer money and purchase goods. A massive shift to the crypto currency Bank could cause «turbulence» in the economy, says the regulator.
Bank of England notes that demand for paper money is «elastic» and can be controlled by changing interest rates. However, the regulator is not sure that this state of Affairs continue with the growth of popularity of digital currencies. The Central Bank fears that the entry of private cryptocurrency could weaken its ability to manage financial stability through interest rates.
Earlier the Bank of England has stated that it sees in the cryptocurrency market risk because it is «not the same size as to represent a macroeconomic risk for the world economy» or financial stability.