21. Juni 2020

A blockchain firm presents an operating system for CBDC to the Bank of England

The UK-based company L3COS has submitted a proposal to the Bank of England, or BoE, for a blockchain-based operating system to drive a digital currency issued by the central bank, or CBDC.

L3COS described the proposal as a response to the Bank of England’s March study paper on CBDCs, which identified a number of benefits and problems associated with virtual currencies for central banks and invited feedback from technology providers, financial institutions and academia.

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A blockchain company presents the CBDC system to the Bank of England
In an article published on 12th June by Verdict, the local British media, the founder and CEO of L3COS, Zurab Ashvil, stated that the company’s platform can facilitate the creation of a Bitcoin Rush for household and business payments.

Asheville defended the benefits that an immutable and transparent digital distributed record offers the government, saying that a CBDC would make „fraud, money laundering or other black market financing impossible.

Ashvil added that:

„Commercial banks and other financial institutions will benefit from the Real Time Gross Settlement System, or RTGS, which is embedded in the L3COS ecosystem,“

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Coronavirus can speed up discussions about CBDC
Despite L3COS’s enthusiasm for a CBDC issued by the Bank of England, the central bank stressed in its March report that it had „not yet taken a decision on the introduction of a CBDC“.

However, the depth of the global crisis caused by the coronavirus has renewed discussions about CBDCs among many policymakers, and the head of the Bank of England’s digital currency team, Ben Dyson, said it was „the right time for us to think about the future of money“ during a webinar in April.

That same month, ING economists Carlo Cocuzzo and Teunis Brosens also concluded that „CBDCs will be a more likely option after COVID-19,“ they said:

„The major role of governments and the close cooperation between them and the financial sector in addressing the economic consequences will guide discussions on CBDCs about the role of the financial sector in serving society.