UK Central Bank offers three models of institutional cryptocurrency

Mark Carney, leader of the Central Bank of the United Kingdom, has recently made a speech regarding the future of finance. He has expressed his support for the idea of the national cryptocurrency of Great Britain. The Bank of England has also published a detailed report about three models of institutional cryptocurrency which indicates that the experts from this organization are indeed reviewing the possibilities of fintech.

The first bank coin strategy called Financial Institutions Access Model or Model FI makes banks and NBFIs (non-bank financial institutions) exclusive users of the digital financial tool.

The second model of Economy-wide Access (EW) adds households and companies - while banks and NBFIs may engage with the central bank which issues the coin directly, these two new groups can buy and sell this cryptocurrency through the exchange platform.

And the third one - Financial Institutions Plus CBDC-Backed Narrow Bank Access (Model FI+) is a merge of two previous concepts: the cryptocurrency access is granted for banks and NBFIs, but there is an organization amongst them which provides access to the central bank digital currency for households and firms - but it’s more limited than in the previous model. Such companies are characterized as indirect CBDC providers (iCBDCPs).

Bitcoin can become outdated if this technology becomes more popular, but judging by the Central Bank documents, officials want to control their cryptocurrencies much more than the developers of common altcoins today. The rumors on the work of the Bank of England researchers have already appeared in the media in January this year.

Image: Rachael King