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MNI BRIEF: BOE Sees Digital Currency Risk To Bank Lending

(MNI) LONDON
LONDON (MNI)

The Bank of England has published a detailed discussion paper on central bank digital currencies, floating the idea of pressing ahead with a CBDC but implementing a transition period during which it could slow the shift to the new currency to ensure financial stability.

The BOE paper is open about the risks to bank lending if businesses and households opt to use a CBDC rather than making deposits in banks. "There may be a trade-off between the optimal provision of transaction services (payments) – and intermediation services (credit)," it states, noting that the final decision on if and when to introduce a CBDC will only be made in consultation with government.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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