Bank of England Could Release Its Own Bitcoin-Style Cryptocurrency This Year

The massive cryptocurrency wave continues to influence financial institutions and this time, we have the Bank of England who seems to be impressed with the decentralized distributed ledger mechanism.

As per the latest reports by The Telegraph, United Kingdom will have “its own Bitcoin-style digital currency” to be released this year. As per the reports, Mark Carney, Bank of England Governor has informed the Treasury Select Committee before the Christmas that he had a word with other central banks about the possibility of launching the country’s own cryptocurrency.

For this, the Bank of England is also said to have established a research unit to develop a prototype cryptocurrency and pitch it against rivals like Bitcoin and Ethereum. The research unit will report back the status of its study within next 12 months.

A local media has reported that if the cryptocurrency possibility turns out to be true and attains a legal status, the transactions of the digital currency would be restricted amongst central banks only. A few days back, Mr. Carney showed a lot of optimism for the underlying decentralized distributed ledger mechanism and said that Bitcoin “is an active area of interest”.

Mr. Carney told the British lawmakers “You don’t end up with those financial stability risks, you get financial stability benefits. And you save huge amounts of computational energy intensity.”

While further talking about the study done by Bank of England regarding the Bitcoin, he said we are “pretty active in it but we’re also disciplined. If we’re going to apply something to the core of the system, it’s going to need to meet five sigma quality rating.”

Majority of the banking institutions have time and again denounced the structure of cryptocurrencies. This is because a decentralized framework is completely free from any control and regulation. However, they have been quite vocal and optimistic about the underlying blockchain technology which allows for instant transfer of funds at a very low cost in comparison to the existing mechanism.

The head of BOE said: “The underlying technology is actually of a fair bit of interest. We are working with it at the Bank of England. Most interesting application that would be beneficial for financial stability and efficiency would be using the blockchain technology for ‘settlements’ between central banks. We are on the case.”

As per the proposed plans, the state-owned cryptocurrency would be linked to sterling. If the idea is applied really into practice, it will set up a new way of storing digital currency with the banks thereby dispensing retail banking system over a period of time.