Governor of the Bank of England (BoE) Andrew Bailey believes that before developing a digital pound, it is necessary to understand what problems it will solve.
Andrew Bailey said he was skeptical about continuing to develop a digital pound after European finance ministers backed further work on a digital euro. According to Bailey, they already have an efficient wholesale cash settlement system, which is constantly updated.
Yesterday, European finance ministers issued a statement saying that work on a digital euro is ongoing, while noting that the development will require further discussion at the political level. In addition, they will have to figure out how this will affect the environment and financial stability.
The head of the Bank of England said that they do not plan to abolish cash in retail. For now, retail payments should remain in their current state. According to Bailey, in the development of the digital pound, there is no main thing – a clear understanding of the purpose, and what problem needs to be solved using this technology.
“Therefore, I believe that the question of whether we need a central bank digital currency remains open until the goal is clearly defined,” Bailey says.
Earlier, former senior adviser to the Bank of England, Tony Yates, said that states should not create central bank digital currencies just to compete with cryptocurrencies.