Bank of England proposes national digital currency based on Bitcoin

The UK central bank’s chief economist and executive director for monetary analysis and statistics offered several ways in which central bankers can conduct monetary policy during a period when interest rates are close to or below zero.

He suggested that central bankers consider making measures like quantitative easing a permanent part of their policy toolkit. However, he warned that trust in central banking could be marred as a result.

One solution, he said, would be for the Bank of England to issue a state-backed digital currency based on Bitcoin. Supporting this initiative would be a negative interest rate levied on paper currency relative to the digital currency.