Skip to main content

POST Cryptocentralbankdigitalcurrency, or something similar

In the speech that the Governor of the Bank of England eh, Mark Carney, didn’t give to the Mansion House in June he devoted some considerable time to the general topic of shared ledger technology, even going so far as to say that

In the extreme, a [shared ledger] for everyone could open the possibility of creating a central bank digital currency.

From Mark Carney: Enabling the FinTech transformation - revolution, restoration, or reformation?

I am not sure that I completely follow Mr Carney’s logic here and I don’t have the benefit of the expert advice that he must have received in connection with this statement but as far as I can tell, there are two entirely separate issues to examine here. The use of the distributed ledger for RTGS, which is the context in which it is mentioned earlier in Mr. Carney’s speech, is wholly unrelated to the provision of a central bank electronic currency and whether it might or might not be a good idea for the Bank of England to create such is nothing to do with the technology.

I suspect that the confusion may have arisen because of the tendency amongst management consultants (and others) to conflate the two entirely different kinds of electronic money: a crypto currency and a digital currency are very different things. If Mr Carney were genuinely suggesting that one of the scenarios under consideration by the Bank of England is that it abandons its responsibility for managing the creation of money and instead turns to a crypto currency, even if it is a crypto currency that is produced as a byproduct of a double permissionless shared ledger spawned by the Bank of England itself, then the value of that currency would not only be beyond political control it would be beyond the Bank’s control and one might imagine the Bank to be somewhat redundant in such circumstances.

The Bank of England is absolutely right to be exploring this new technology and I certainly think that it has something to offer. But that does not mean that the Bank of England is going to start using Bitcoin as a settlement system or that bitcoins will replace Sterling!

From RTGS NBG OMG SOS SLT PDQ SLAP | Consult Hyperion

On the other hand if Mr Carney were genuinely suggesting that one of the scenarios under consideration by the Bank of England is that it creates a digital currency, then I say more power to him. I cannot think of a single reason why such a digital currency would be a crypto currency or why it would be in any way related to the shared ledger used to process  the payments, but that doesn’t mean it wouldn’t be a cracking idea. A digital currency platform with right APIs in place (providing risk-free, genuinely instant and zero-cost transfers between accounts) would be an amazing platform for a Digital Britain.

Comments

Post a Comment

Popular posts from this blog

Financial Cryptography: Corda Day - a new force

Forum friend Ian Grigg, who I always take very seriously indeed on any such topic, wrote about Corda on his blog and concluded with a powerful statement. Bitcoin told the users it wanted an unstoppable currency - sure, works for a small group but not for the mass market. Ethereum told their users they need an unstoppable machine - which worked how spectacularly with the DAO? Not. What. We. Wanted. Corda is the only game in town because it's the only one that asked the users. It's that simple. From Financial Cryptography: Corda Day - a new force xxx It seems to me, however, what Ian is pointing to as the greatest strength of their approach is also the greatest weakness. A staple feature of unimaginative management consultants presentations about innovation is some variation on the statement by Henry Ford that if you had asked users what they wanted, they would have asked for faster horses coupled with some variation on the statement by Steve jobs that it was pointless ask...
Post a Comment
Read more

Barclays slated after CIO takes a year to open a bank account

xxx The rigorous KYC procedures at US banks the New Jersey-based crime ring created more than 7,000 fake identities to get tens of thousands of credit cards From  Woman Gets 3 Years for Role in $200M Credit Card Fraud Scam - ABC News xxx xxxx Barclays slated after CIO takes a year to open a bank account : "An adviser to a new charitable incorporated organisation that spent more than a year trying to open a bank account has blasted Barclays for its onerous demands and disproportionate due diligence." xxx In a recent survey for VocaLink, some two-thirds of respondents said that they saw value in the establishment of a central KYC utility. They are wrong. We don’t need a central KYC utility, we need a federated reputation infrastructure. Or, to put it another way, a financial services passport ( as I mentioned earlier in the year ).
Post a Comment
Read more

There is no excuse for not taking cards

So we went to the pub. For lunch. Seven of us. Say £20 per head. £100+ quid. Say £50 quid gross for the pub. Colleague goes to order food and drinks and pay at the bar. Apologetic barmaid comes over to explain that their “card machine” is down, so she can only accept cash. Under normal circumstances I would have simply walked out, feeling it wholly inappropriate to reward such a poorly managed establishment and, as a functioning actor in a capitalist economy, done my duty to depress their lunchtime takings. Here’s what we wanted to say: This is absurd. This is 2016 not 1916. Your card machine is down? Well, so what! Are you seriously telling me that mein host has no mobile phone number capable of registering for PingIt or PayM? That none of the staff or the pub itself have a PayPal account that I can send the money to? That neither the owners nor managers not contingency planners thought to tuck an iZettle behind the bar to use when the clunky and expensive GPRS terminal fails for o...
Post a Comment
Read more