BoE: beware of the impacts of digital currencies

Digital currencies could impact central bank balance sheets. The opinion was expressed by the Bank of England’s Executive Director for Markets, Andrew Hauser, in a recent speech at the Federal Reserve in New York. “The eventual design of any systemic digital currency (CBDC)” – he explained – will affect the balance sheet of central banks, which should start preparing for the possible implications. Hauser also said that digital currencies, in general, could affect the relationship between central banks and commercial banks. In the wake of the collapse of the stablecoin Terra, he then referred to the need for regulation of the system to avoid further disasters.