In the last several days, officials from Hong Kong and the UK have weighed in on the possibility of their jurisdictions issuing central bank digital currencies (CBDCs).
Following a series of blockchain-related questions from legislator Dennis Kwok, Hong Kong's acting secretary for Financial Services and the Treasury Joseph Chan offered a response in which he noted that the Hong Kong Monetary Authority (HKMA) "has no plan to issue CBDC at this stage." He went on to say, however, that the agency would "continue to monitor" other countries' progress on CBDC-related efforts.
In the May 30 statement, Chan also noted that two committees under the auspices of the Bank of International Settlements (BIS), which describes itself as a "bank for central banks," recently launched a working group "comprising all major central banks." At least one of those committees boasts People's Bank of China and HKMA personnel as members.
The two groups, the Committee on Payments and Market Infrastructures and the Markets Committee, recently released a report in which they conclude that, as Chan put it, "CBDC for wholesale payments look broadly similar to, and not clearly superior to, existing infrastructures."
Furthermore, he said, the document warns that a retail CBDC would have to compete with "private retail payment products," and that the mere possibility of issuing a retail CBDC "raises important questions and challenges that would need to be addressed."
In short, he said, "CBDC remains a subject which requires further study and more proof-of-concept work to ascertain its feasibility for payment applications."
Meanwhile, in an interview published on the same day by Sweden's central bank, Bank of England governor Mark Carney pondered what role a central bank might play in the shift from paper to electronic cash:
"Is our role going to be changing the payment systems and helping private providers of digital money, or will we go all the way to a central bank digital currency?"
Without answering the question, Carney described it as "one of the most exciting and important areas and certainly the most important area to get right."