“We are looking at the question of, should we create a Bank of England digital currency. We’ll go on looking at it, as it does have huge implications on the nature of payments and society. I think in a few years time, we will be heading toward some sort of digital currency. The digital currency issue will be a very big issue. I hope it is because that means COVID will be behind us.“Andrew Bailey Governor of The Bank of England
Bank of England going Digital
The Governor of the Bank of England, Andrew Bailey, has announced that they are exploring the possibility of implementing a digital currency in a few years. This all began back in 2014 when the bank of England initiated an investigation about digital currency. Now six years later in March 2020, a paper was released called ‘Central Bank Digital Currency – Opportunities, challenges and design‘ which described the possible technological structure of an upcoming Central Bank Digital Currency.
China takes the lead
However, whilst central banks are caught up in endless debates, China has forged ahead by initiating the digital Yuan, and an important blockchain foundation project designated the ‘Blockchain-Based Service Network (BSN)’,
Central banks may find themselves behind in the technology whilst China’s established digital Yuan may find itself being the worlds reserve currency.
Bank of England reformations
The Central bank has already started to reform systems in preparation of introducing the Central Bank Digital Currency to the public. The first steps may well be offering the digital currency as an addition to the cash system, later once this has been accepted, making all payments electronic.
There are many aspects to be considered. Rural communities are already having difficulty obtaining cash as well as banking services. The closure of post offices across the country has left some communities unable to withdraw funds since they often receive bad mobile and internet reception. The entire country will need to be connected to a reliable high-speed internet with mobile access.
ATM machines will disappear as the digital currency becomes established, yet once again it is the rural communities that will suffer. Without cash, children will be unable to make purchases and ice-cream vans will have to check internet connections in rural areas and beaches before sales. The introduction of the Central Bank digital currency will change life as we know it.
During the Covid-19 lockdown over 7,000 ATM’s were closed across the UK due to social distancing, that is 10% of the UK’s ATM network. The people that rely heavily on cash are those that can’t afford mobile phones and don’t have digital access. Consequently, the closing of ATM machines has caused the underprivileged and the homeless difficulties in accessing cash, how much more hardship will they have to endure when cash is removed from society altogether.
Do you remember this statement?
“The digital currency issue will be a very big issue. I hope it is because that means COVID will be behind us.“Andrew Bailey, Governor of the Bank of England
This seems like a very odd statement. Why does the end of COVID-19 make a better situation for the advent of digital currency or perhaps Mr Bailey is suggesting that the end of the pandemic will make people more likely to welcome the electronic system.
There appears to be the consensus amongst officials that life cannot possibly return to pre-COVID days and that also seems to include our association with money.
Due to Covid-19, systems have been put in place to ‘protect the public’ from the dirty, virus covered notes and coins. This has encouraged the nation to make contact-less electronic payments, thus removing the threat of infection. Therefore COVID-19 has been a convenient tool for the elites to discourage the use of cash in preference to the new electronic payment system.
Love it or hate it digital money is the future. The gradual approach to introduce a digital currency has already begun and COVID-19 has brought many of the dissenters in line. Most of the younger generations already prefer electronic payments, but the die-hard cash advocates may require the cash to be pried from their fingers by the state.
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