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Creating a digital currency with other central banks is “worth looking at because there is a big issue with the cost and efficiency of payments” across borders.
“We should always be challenging ourselves on whether we do more, because the consumer demand, both in advanced economies and in developing economies, is for greater efficiency,” Ramsden said in a Bloomberg interview Thursday. “There’s a big prize here.”
At the same time, European Central Bank board member Benoit Coeure said this week that regulators have to be prepared for a revolution in digital currencies and that central banks must adapt. A Group of Seven report said that company-created currencies will create challenges for competition and antitrust policies.
Ramsden said the BOE’s latest research into machine learning has shown greater development and wider use in trading strategies than had previously been appreciated. While that could offer significant efficiency gains, he said it also means the central bank needs to consider the risks and put in place an accountability regime.
Asked about the extent of agreement within the nine-member group over the view that the lower bound for rates lies just above zero, Ramsden said that “we would revisit that when we needed to, but that’s a pretty stable view.”