Major central banks join to consider creating digital currencies

Josh Peachey's picture

Major central banks are looking at the case for issuing their own digital currencies, the Bank of England and European Central Bank said this week.

Benoit Coeure, a European Central Bank official, is to head up a new group that includes Britain, the eurozone, Japan, Sweden and Switzerland.

A statement said that the group will assess "economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies.”

Across the world, Central banks are considering issuing their own digital currencies and  China’s has emerged as the frontrunner, although details are still under wraps.

Facebook’s ambitions of launching its Libra cryptocurrency has forced countries to think about who will control money in the future.

Last year, Bank of England Governor Mark Carney took aim at the U.S. dollar’s “destabilizing” role in the world economy and said central banks might need to join together to create their own replacement reserve currency.

Carney also said that the best solution would be a diversified multi-polar financial system, powered by technology. 

In the United States, Fed Chairman Jerome Powell said in November it was monitoring the digital currency debate but not actively considering its own amid a host of legal, regulatory and operational questions.

Last year, Patrick Harker, President of Philadelphia Federal Reserve bank, said that it was “inevitable” that central banks, including the Fed, would eventually start issuing digital currency, but that the US wouldn't be the ones to lead on it.