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Deputy Governor of the Bank of England believes that a digital pound may be necessary

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Bank of England Deputy Governor John Cunliffe said the UK may need a digital pound. Cunliffe said this while discussing the recent collapse of the Cryptocurrency exchange FTX And how this will affect the UK’s decision to issue a central bank digital currency.

Bank of England Deputy Governor says digital pound is needed

Cunliffe was earlier He said It was initially believed that there was no connection between the collapse of FTX and the central bank’s role in creating a central bank digital currency. However, he said he understood the public’s concerns about CBDCs and the safety of users’ funds on exchanges.

Speaking at a conference at Warwick Business School in Coventry, Cunliffe said that “Over the past few days, I’ve had some comments about the impact of FTX’s collapse that we need to get involved and issue a digital citizen pound – and with the effect that FTX is showing we don’t need to do that.”

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He also added that FTX has been an important symbol of emerging technologies and how these technologies can transform financial services and change forms of money.

The FTX exchange filed for Chapter 11 on November 11 following a liquidity crisis. Users scrambled to withdraw funds from the exchange after Binance CEO Changpeng “CZ” Zhao said the exchange would liquidate all of its FTT holdings. A previous Coindesk article also revealed that Alameda Research, a sister company of FTX, has a weak balance sheet.

Cunliffe saw that the cryptocurrency market needs to be properly regulated to protect investors, promote financial stability and support innovation. He also added that the current regulatory framework for the traditional financial sector also needs to cover the crypto space.

“Our approach as regulators must be open – and by that I mean we must be ready to explore if this is the case and, if so, how the necessary level of assurance equivalent to that in conventional finance can be achieved. But we must also be firm that where not Whenever possible, we are willing to see innovation at the cost of higher risks.”

UK Crypto Regulations

The UK Parliament is currently considering legislation to support crypto assets as financial instruments and ensure that regulators have more control over the sector.

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If this motion is passed, then Bank of England Crypto companies issuing stablecoins will be regulated. The Bank of England will begin a consultation phase on stablecoins in 2023 to understand how these assets maintain transparency, accountability, governance, corporate structure and standards within the financial sector. He added that the situation with FTX showed that these aspects were important.

The Bank of England has been considering issuing a digital pound, saying it is being driven by trends in the payments sector, such as the diminishing role of cash in the modern world and the digitization of everyday life.

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Ethereum developers target March 2023 for Shanghai hard fork

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according to Discussion At the 151st Ethereum Core Developers meeting on December 8, core programmers set an initial March 2023 deadline for Ethereum’s Shanghai hard fork. Additionally, developers will aim in May or June 2023 to release Ethereum Improvement Protocol (EIP) upgrade 4844 that will provide initial network participation.

Although the long-awaited Proof-of-Stake merger upgrade was completed on September 15, Ether (stETH) is currently in the works. Locked on the Ethereum Beacon Signal Chain. The token was created by decentralized finance protocol Lido, with approximately 3.5 million stETH ($4.48 billion) in circulation. After the Shanghai upgrade, stETH users can withdraw their funds along with any applicable staking rewards to validate network transactions. The Ethereum Foundation said it organized the upgrades in this way to “simplify and increase focus on a successful transition to Proof of Stake.”

After the hard fork, the EIP-4844 upgrade is designed to introduce a new binary data transaction prototype previously invented by the developers on February 21, 2022. Currently, Layer 2 technologies such as Optimistic Rollups can move Ethereum computation and network storage off-chain to improve scalability 10x to 100x . The developers expect that offering large mobile packages that can hold cheaper data in Ethereum transactions could improve pooling capacity by up to 100x. However, while the upgrade will lower transaction fees on Layer 2 solutions, it will not affect Ethereum gas fees.

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Last December, Ethereum co-founder Vitalik Buterin shared just that game over It is for the blockchain to function as a simple base layer, with “the complete convenience of users storing their assets in ZK.” [zero knowledge]Verify full EVM operation [Ethereum Virtual Machine]. Buterin also warned that hash sampling and data availability are “complex techniques” that will take years of scrutiny and improvement to implement.