Is Britain crashing out of the Union? Or is the EU and Brussels bursting at its seams? We have heard about Brexit quite a lot already, but one thing is certain: it is happening. With the Conservative Party’s Boris Johnson getting a clear mandate in UK’s general election and the final paperwork signed, it is now in due course.
We are just TWO days away from the official Brexit date, which after endless debate and extensions is 31st January 2020, 23:00 GMT. But the public broadcaster, the BBC reassures that during the 11-month Brexit implementation period, the United Kingdom will continue trading on EU’s rules.
So the UK and its biggest trading partner, the EU are set to maintain a close relationship for months to come. One of the most thorny issues around Brexit is trade. While Britain seems to be desperate to end the jurisdiction of EU bodies, like the European Parliament, some regulatory cooperation is simply necessary to ensure the free flow of goods.
…So why did England’s central bank join Europe’s crypto consortium?
You heard that right. Just last week, the Guardian reported on the Bank of England’s sudden move to join the European Central Bank’s (ECB) efforts to look into cryptocurrency. This turn is thought to be motivated by a growing interest in central bank digital currencies (CBDC) by players around the world.
And the ECB’s intention is to “stay ahead of the curve”, says its new President, Madame Christine Legarde, cited earlier last month by Reuters. The real possibility of the EU giving its blessing to crypto under the guise of “stablecoins” is not something entirely new. The idea was already floated by its previous administration. Is Europe capable of launching its own state-backed, centrally-issued cryptocurrency?
Reading the ECB’s own publication, “Stablecoins – no coins, but are they stable”, the block is certainly warming up to the idea.
In respect, the Bank of England has some catching up to do. It has only opened up to vaguely considering CBDC and embracing virtual currency payments last year, with the possible disruption caused by the launch of Facebook’s Libra. Until now, the Bank’s top boss, Governor Mark Carney has been cautious to make any explicit moves.
Post-Brexit: Does anyone trust Britain to be a team player?
The crypto consortium is largely lead by European partners, with either ECB or ECB’s former top dogs, taking leading roles in the project. But it also includes Sweden, which is not in the Eurozone. Or Switzerland, which is out of the Union but a full member of the European Economic Area (EEA). But Europe is aspiring to be a global player and has invited also invited overseas partners: Bank of Canada and Bank of Japan to share their experiences.
While the consortium has no legal powers to regulate or issue recommendations, it is set to influence top policy-makers. Considering its make-up, it is fair to assume that it will be representative of the EU and most of its member states’ views on cryptocurrency. It will hopefully steer through the policy hurdles and make digital currency payments more readily available, regardless of shape and form.
The role Britain, and in this particular case, the Bank of England will take in another question. But the country is set on not losing relevance in today’s world. Perhaps this is why it has decided to bite the bullet and join a project of its next-door neighbors.