MNI BRIEF: BOE Cunliffe Downplays Banks' Digital Currency Risk

The Bank of England must proceed with care developing a digital currency (CBDC) because of financial stability risks, Bank of England Deputy Governor Jon Cunliffe said Thursday. Cunliffe told an online conference that an upcoming BOE paper would look at the risks it poses to banks.

Some analysts have warned that CBDCs could hit banks hard but Cunliffe, who represents the BOE on Bank of International Settlement's digital currency committee, spoke favourably about them but warned that purely private digital currencies, not backed by the state, would risk undermining confidence in money in future crises.

The BOE "doesn't have the responsibility to preserve the current model of banking" he said, adding that we could be on the cusp of a revolution in digital currencies.