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Bank of England and Five Other Central Banks to Assess Benefits of CBDC

It has become known that United Kingdom premier Boris Johnson’s government has lost its first parliamentary votes since the snap general election because the House of Lords applied three defeats over Brexit legislation.

The upper chamber voted in favor of giving physical documents as proof of their right to stay to EU citizens who live in the UK to be, once the country has left the bloc. On January 17, European Parliament Brexit coordinator Guy Verhofstadt said that the country will not automatically deport European Union citizens.

He added that there will be “a grace period” but even if they fail to sign up for staying in the country, there still won’t be automatic deportation. “After the grace period they will have a possibility to apply, giving the grounds why it was not possible to do it within the normal procedures,” said Verhofstadt while Prime Minister Boris Johnson confirmed.

The European Parliament will vote on the Brexit deal between the European Union and the United Kingdom on January 29, two days before the Brexit deadline date.

Bank of England and CBDC

Be it as it may, it is not the only reason to speak about the UK these days. Bank of England has also made headlines as it united forces with five other major world central banks to investigate what a central bank digital currency (CBDC) can bring to society.

The other five banks are the Bank of Canada, the Bank of Japan, the European Central Bank, the Sveriges Riksbank, the Swiss National Bank, and the Bank for International Settlements (BIS).

If a CBDC  seems to be workable, cryptocurrencies could be at the command of one of the biggest institutions in the world.

As per the official announcement, the central bank collective will “assess CBDC use cases, economic, functional and technical design choices, including cross-border interoperability, and the sharing of knowledge on emerging technologies.”

The Bank of England has joined into the trust together with five of the world’s biggest central banks to investigate the economic opportunities of a central bank digital currency (CBDC).

Also, the bank wrote that:

“The banking cooperative also plans to coordinate with global regulators, such as the financial stability board, as well as the committee on Payments and Market Infrastructures (CPMI).”

Are Central Bank Digital Currencies Imminent?

The traditional financial institutions were pretty skeptic when we’re talking about CBDCs. Especially the problem was when Facebook was starting to mention the probability of its own cryptocurrency Libra.

Danny Scott, CEO of British Bitcoin exchange CoinCorner, says that the whole Libra story came as “no surprise”.

He said:

“The central banks are looking into the possibility of issuing their own digital currencies. The announcement of Facebook’s Libra cryptocurrency last year highlighted the potential threat of a global digital currency in control of the wrong people. It was only a matter of time before the banks took action.”

Scott also said that this isn’t his first time he sees the banking sector exploring blockchain technology.

“In 2014, we saw the creation of R3, a group of financial companies including big names like HSBC, J.P. Morgan and Bank of America which looked at the potential uses of blockchain technology in the traditional banking industry,” noted he.

Bank of England and Five Other Central Banks to Assess Benefits of CBDC