BoE exec thinks crypto is not like money

Tom Hutton, Director of Fintech at the Bank of England, spoke at the Crypto and Digital Assets Summit in London about the UK’s plan to establish a central bank digital currency (CBDC). Hutton emphasised the importance of privacy and anonymity in the bank’s digital currency plans. While he believes a “digital pound” is only viable if it has the highest standards of privacy, he also stated that anonymity was “a public policy problem and something that should not be allowed to continue.” He further stated that privacy and anonymity should not be used synonymously, which highlights the Bank of England’s stance on CBDCs.

Mutton emphasised that the digital pound will not be interoperable with cryptocurrencies, as they do not “fulfill any of the functions of money.” During his talk, he also commented on the use of cryptocurrency for criminal activities, which experts estimate accounts for only 0.10% to 0.15% of all cryptocurrency use. He concluded that anonymity was a public policy problem and should not be allowed to continue.

Hutton’s comments come after the Bank of England’s deputy governor, John Cunliffe, spoke at the Innovate Finance Global Summit last month. Cunliffe tackled CBDCs and stablecoins, stating that the latter would “offer the possibility of greater efficiency and functionality in payments.” However, he also mentioned that current stablecoins would not meet the standards for robustness and uniformity applied to commercial bank money and existing payment systems. In reference to a national CBDC, Cunliffe stated that a digital pound is “likely to be needed if current trends in payments and moneycontinue”

It is yet to be announced when the digital pound will be launched, or whether it will be launched at all. The Bank of England issued guidance in February, stating that such a product might be needed in the future, but it was “too early to decide” at the time.