We are carrying out research into digital currencies and the technology that supports them.
Cryptocurrencies or ‘crypto-assets’
Cryptocurrencies combine new payments systems with new currencies that are not issued by a central bank. Examples of privately issued digital currencies include Bitcoin, LiteCoin, Ether (Ethereum) and Ripple.
Our Financial Policy Committee has assessed private digital currencies and concluded that while the underlying technology has potential, they do not currently pose a risk to monetary or financial stability in the UK.
However, cryptocurrencies do pose risks to investors and anyone buying cryptocurrencies should be prepared to lose all their money. We continue to monitor developments in this area. Most recently, the Bank of England has been part of the Cryptoasset Taskforce, working alongside HM Treasury and the Financial Conduct Authority to explore cryptoassets and the underlying technology, assess the associated risks and potential benefits, and set out the path forward with respect to regulation in the UK. The findings of the taskforce (published 29 October 2018) can be found here. More broadly, we have written about the economics of digital currencies and innovations in payment systems and the emergence of digital currencies.