The House of Lords’ influential committee said the House of Lords’ influential committee must decide whether to introduce state-sponsored digital currencies because the move will have “widespread consequences”, not the UK Parliament. I warned on Thursday.
Rejecting many of the potential benefits of digital currencies issued by central banks, a report by the House of Peers Economic Commission stated that the proposal had potentially serious implications, including privacy issues. It described the concept as a “solution to find a problem.”
BoE, which established a joint task force with the Treasury last year and evaluated the costs and benefits of its own digital currency, is one of more than 90 central banks around the world exploring this concept.
The idea is to create a digital banknote equivalent for people to buy goods and receive payments, linked directly to the central bank. It will compete with commercial banks that already allow people to make digital payments via credit and debit card transactions and other forms of electronic payments such as PayPal.
BoE states that central bank digital currencies can improve transaction efficiency and reduce costs.
However, the committee’s report, of which former BoE Governor Mervyn King is also a member, found few compelling reasons for such currencies. “I haven’t heard any compelling examples of why the UK needs retail. [central bank digital currency].. “
State digital currencies, especially those that include personal accounts held by BoE, “will have widespread impact on homes, businesses and monetary systems over the next few decades and can pose significant risks depending on the design method. There is. ”
The report holds money for people as such currencies are used by the state to spy on people’s spending habits, even though BoE Governor Andrew Bailey told the Commission that it was not the purpose. Expressed concern that it could be used to claim for.
“The application of monetary policy should not be a motivation for the introduction of central bank digital currencies,” the report said.
Citing the vulnerability to interference by hostile forces and the stability of the rest of the financial system, he said it had potential implications for national security.
For all these reasons, the report stated that any move by the state to reflect other digital currencies would require the consent of both parliaments through major legislation.
“We were really worried. Frankly, I was a little disappointed with the evidence from the Treasury on this issue about its role in the introduction of Parliament. [central bank digital currency]”Sir Michael Forsythe, the Conservative peer and chairman, told FT.
“When the Treasury submitted the evidence, he didn’t really alleviate our concerns that this was just cooked by the Treasury and the Bank of England and could be treated as being in the Bank of England. [BoE]”Bailiwick jurisdiction,” he added.
Central bankers regularly say that launching their own digital currencies can avoid the threat of private-sponsored currencies launched by companies such as Meta, which was formerly Facebook. Authorities did not fully outline what threats they pose, according to the report.
BoE declined to comment on this report.