The technology behind central bank digital currencies (CBDC) could be “tens of thousands of times more efficient per transaction” than bitcoin, according to the Bank of England’s fintech director, Tom Mutton.
During his speech at the Future of FinTech Conference on Thursday, he voiced the Bank of England’s (BOE’s) noncommittal interest in the development of a CBDC and its commitment to keeping cash “available for as long as [people] wish to use it.”
Talking about the bank’s 2020 survey on CBDCs, Mutton said, as quoted by Coindesk, “Bitcoin, given its performance shortcomings and energy inefficiency, is in no way a relevant comparison for the sort of technology we might use in a central bank digital currency.” He also called on UK citizens to not “throw the blockchain baby out with the bitcoin bathwater.”
According to Mutton, the BOE’s potential digital currency could play a role in the country’s transition to a net-zero economy. To do so, Mutton said, energy efficiency should be a core consideration in the design of the CBDC and should come with data and analytics technology that will allow the central bank to optimize the financial system to be as energy efficient as possible.
BOE Governor Andrew Bailey said last month that digital currencies “have no intrinsic value.” He has warned that people who invest in crypto should be prepared to lose all their money. Earlier in April, the BOE said it would team up with the UK Treasury to explore CBDCs. The taskforce is expected to look at use cases, opportunities, and risks of a potential digital pound.
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