The Bank of England has caused a bit of a stir in the crypto community. It recently came to light that they were investigating creating a blockchain-based token of their own. This would allow their customers to receive all the advantages that blockchain transactions offer. If it were to be implemented, it would mean that customer transactions would take place in a matter of seconds.
Why Implement a Bank of England Blockchain-Based Token?
This move would also mean that they would have the capabilities of monitoring their system much more efficiently. Blockchain tech will give them a more complete overview of how money is moved between one person or another. This is a worrying proposition for cryptocurrencies, which, at their very essence, seek to put the power in the hands of the people. It’s all about taking the banks out of the equation and eliminating the middleman.
Efficiency is the Key
The efficiency of blockchain-based technology is worth looking into. The BoE took a serious notice when the price of Bitcoin surged in late 2017. The basic principle is sound and it wouldn’t take much to implement some form of blockchain into their system. They also figured it could be a Big Data goldmine, and they’re right. There’s a pretty big caveat, however, and it’s a concept that is very much the core of all cryptocurrencies. That concept is decentralization.
Better Isn't Always Good For Everyone
The fear that the BoE has is the very real possibility of a token causing more traditional banks to suffer. The worst case scenario is that too many customers readily made the switch to using tokens too quickly. This could, in theory, lead to those banks simply going under due to lack of public interest. That would be a big blow to the Bank of England and the economy as a whole. No matter what the eventual outcome, traditional brick and mortar banks will end up taking a big hit.
Bank of England's Official Stance on Blockchain Tech.
The BoE publicly has stated that they don’t currently have any plans to implement blockchain technology into their operation. That doesn’t mean that they’re not still looking into the idea. There is a team currently working towards determining if the idea can be beneficial to the Bank of England, with their report still in the works. It won’t be ready for another year or so, by the looks of things. As such, it is too soon to tell if it is going to have any meaningful impact.
A Blockchain-Based Future
Blockchain technology is extremely applicable to many facets of our society. By its nature, it has the potential to achieve both positive or negative effects depending on how it is implemented. A big issue is that implementation must be monitored closely. It is likely that this move by the BoE is a big step forward for blockchain technology.