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BofE advertises for digital currencies research lead

19 August 2016  |  6634 views  |  0 London stock exchange 2

The Bank of England is advertising for an economic research lead at its digital currencies team as it steps up its investigation into a central bank-issued 'Britcoin'.

The BofE has been exploring the possibility of a central bank digital currency (CBDC) — a universally accessible and interest-bearing central bank liability, implemented via distributed ledgers, which competes with bank deposits as medium of exchange.

According to a job listing, the new research lead will join a digital currencies team that is examining a CBDC from a technological, economic, and regulatory/legal perspective and whether it is desirable.

The new position will include responsibilities to carry out original research, provide leadership for other internal and external research, and offer policy development and project management.

The BofE's deputy governor of monetary policy Ben Broadbent has floated the idea of using distributed ledger technology to enable individuals to hold digital currency accounts with the central bank. In a speech at the London School of Economics he suggested a BofE account could be simply 'e-cash' that can only be used for retail transfers, or it could be a proper account that pays interest.

However, he warned that such a move would have far-reaching consequences for the commercial sector. On one hand it would make banks safer by reducing the risk of a run if a shock causes people to try to close accounts. However, he warned, taking deposits away from banks could make it harder for them to make loans and make them more reliant on wholesale markets.

A recent research paper by his colleagues at the bank, John Barrdear and Michael Kumhof, says that such a plan could have major economic benefits, with issuance of 30% of GDP, against government bonds, potentially permanently raising GDP by as much as three per cent.

Candidates with strong understanding of economics and financial systems have until 15 September to apply for the new role which has a salary of up to £70,000.

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