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Birch is (and has been for a long time) a committed advocate for the abolition of cash, and for a transition to digital currencies – whether they be state-issued fiat currencies or competing private currencies. In this report, he looks at what the Bank of England is saying and what the PBoC is doing – and he concludes that we risk being left behind.
That said, he gives great credit to the former Governor of the BoE, Mark Carney, who (he feels) was well ahead of the curve – at least as far as central bankers were concerned. As he puts it:
‘When people such as Mark Carney start talking about synthetic hegemonic currencies, we must conclude that something is afoot. I think that people underestimate the impact of digital currency – and look at innovation by Facebook when they should be looking at the People’s Bank of China.’
(The innovationby Facebook is, obviously, Libra – or, as Dave calls it, ‘Facebucks’.)
This paper sets out what a digital currency is (and how it differs from cryptocurrency), explains why there is a focus on digital currency right now, and explores the implications of the launch of digital currencies – whether by Bitcoin entrepreneurs or by the Fed. It ends with a call for a co-ordinated strategic response based on innovative policies on digital money, digital identity and digital diligence.