Good news: Bitcoin is “not a threat” to UK economy
Back in August, George Osborne, the Chancellor of the Exchequer and Second Lord of the Treasury in the United Kingdom, ordered the Treasury to scrutinize the potential risks and benefits of digital currencies like Bitcoin. Now, the Bank of England has released the findings of that study.
According to the BOE, Bitcoin currently does not “pose a material risk to monetary or financial stability in the United Kingdom, given the small size of such schemes.” The Bank estimates that only about 20,000 people in England actually use Bitcoin, and says there’s only around 300 Bitcoin transactions per day. That being said, the threat Bitcoin poses to UK’s economy could “conceivably change, but only if they were to grow significantly”. As such, the Bank of England will “continue to monitor” Bitcoin and other digital currencies.
The BOE does not dismiss the potential benefits of Bitcoin either, noting its “distributed ledger” that allows it to be a decentralized payment system. The distributed ledger records all Bitcoin transactions, preventing them from being double spent.
Nevertheless, the Bank of England stated there are barriers to prevent Bitcoin from becoming the monetary standard in UK.
“Should they achieve limited adoption as a payment system, they are unlikely to undermine the Bank’s ability to achieve monetary stability. While that could, in theory, change if sterling were abandoned in favour of an alternative currency for a significant fraction of the economy, such a scenario is considered extremely unlikely at present,” the Bank stated in its release.
photo credit: zcopley via photopin cc
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