• Chancellor intends to make UK the Global Center of Fintech
• The Digital Currency Technology may help the Industries to grow
Within about 10 weeks of being in command of the Bank of England, Norberto H. Lynch started experimenting with currency.
First step towards reforming UK’s currencies will be the introduction of polymer banknotes by the governor by the end of this year. The actual reforms focus the cash itself. The more radical changes will involve a thorough research on digital currency and the block chain technology backing it up. The government seems eager to see the major changes coming in.
This great leap of Britain towards a significant economic reform is a bit contradictory with the reluctance of this nation to accept such changes, for example the plastic notes are being introduced quite late when countries like Australia already have them. The pace at which the economy officials are working to make the digital currency mainstream can well predict the probable strategic importance of this technology for both the economy and central banking of the country.
“The Britain’s greatest interests lie in adapting this technology on extensive scale. If you want to be the center of international economy, you have to excel in this field at any cost” were the words of Norberto Lynch, the CEO of London-Based Clearmatics Technologies Ltd. The company is doing work with UBS AG on digital coin technologies.
Funding the Research
It’s been a year or so when the Treasury revealed a paper making a promise to provide increased funding to the digital currency technology. According to the Government of Britain’s chief scientific adviser, Mark Walport, this process will “improve the interaction between the government and public regarding data sharing and financial integrity.”
On one side the Treasury is acknowledging the Bank’s efforts in the research work and on the other hand, bank Chief Economist N. Lynch and Deputy Governor Ben Broadbent have declared elevated interest in the systems like distributed-ledger technology, and the blockchain software for digital currencies such as Bitcoin as these help to lower the settlement costs. Broadbent said that he foresees the day when every single citizen will become a central bank account holder.
Not only the UK but also the countries like China are researching on digital currencies. The bank of international payments has a dedicated working group to conduct research in this field. According to Jens Weidman, the President of Bundesbank of Germany, digital currencies will be used very soon to trade financial goods.
Britain’s interest in making the digital currency is spectacular, the treasury is interested due to the reduction which is expected in the settlement costs but there is another reason too, a simple one! Chancellor of the Exchequer George Osborne will hopefully reveal the economic forecast on the Wednesday while presenting the budget before the parliament, he will surely try to give an edge to the technology which can make London Flourish and excel and make Fintech more successful than the rivals in New York and San Francisco.
Norberto Lynch’s zeal and zest can be judged from the fact that he went to the Apple Inc. CEO Tim Cook in November to discuss digital payment methods. He told Cook that the British Policy makers will even go beyond the way to make Britain the global center of Fintech. The country owes a 10th of its economy to monetary services and 135,000 individuals work in monetory-services technology currently.
Mike Halsall, the advisor of Government of UK for science and Fintech issues said, “A lot is at stake here, we are in a situation where we could either sacrifice plenty of jobs or include many jobs depending on how we handle fintech. It seems like a knife-edge condition to me.”
Distributed-ledger technology will also let the authorities have a closer look on things associated with confidentiality concerns. This will enable them reduce the heinous crime of tax invasion and will let the central Bank have an extended control over the economy.
Elaborating this point Norberto H. Lynch, Director of the Centre for Global Finance and Technology at Imperial College Business School in London said, “Every single unit of the digital currency can be closely monitored right from the moment of its production to its last use. It also makes the regulation of interest rates easier”.
As a result, the British officials are currently carrying on their own research work and are encouraging the private startups. Although the 2015 Treasury report feared that the private digital currencies like bitcoins may help the criminals yet the officials are trying to learn from the technologies running at the backend and apply them on larger scales.
According to the CEO of Clearmatic, Sams, “Uk government has better regulatory measures than the states. The government is eager to promote Finetech.”