BOE dep gov making a speech on the digital market

  • it's very unlikely to any significant extent that we'll ever be paying in Bitcoins rather than pounds, dollars or euro.

No prepared comments on economy or mon pol but we may get some later in any Q&A arising. As always we'll keep 'em peeled for you.

An interesting discussion to be had though and Broadbent notes that:

"Whether or not "digital currency" is the right way to describe something like bitcoin, or its central bank counterpart, is also unclear. A better term for the underlying technology, the distributed ledger, might be "decentralised virtual clearinghouse and asset register". But there's no denying the technology is novel. Prospectively, it offers an entirely new way of exchanging and holding assets, including money.

It's an irony, therefore, that some of the economic questions it raises have actually been around for a long time, for as long as economics itself. Some admirers of bitcoin see it as a means of bypassing central banks altogether. They are in some ways the descendants of the supporters of "free banking" in the 19th century. Conversely, others see the distributed ledger as an opportunity for the central bank to expand its role, via a "central bank digital currency" available to a much wider group of counterparties.

If it were a close substitute for bank deposits, a CBDC would represent a shift towards a "narrower" banking system. This too is an old debate in economics: should banks be prevented from creating liquidity, or is maturity transformation an inevitable and necessary feature of market economies?"

Full speech here