Barely a week after the World Economic Forum published a 139-page report that focused on blockchain all through without a mention of Bitcoin, it has released a Youtube video titled: What would happen if the United Kingdom issued a digital currency like Bitcoin?
The less-than 2-minute informative clip highlights key findings attributed to the Bank of England and the IMPACT Institute for the Digital Economy as sources as to what the UK would benefit by issuing a digital currency.
Huge potential of Blockchain in the UK
The Bank of England modelled an economy with a digital currency equal to 30% of GDP with a simulated digital currency that was subjected to real world business cycles.
“The results suggest a 3% annual increase to GDP. An increase of $80 billion to the United Kingdom GDP,” it shows, adding that an explanation was that the central bank’s digital currency reduced both interest rates and the cost of financial transactions.
The study found that digital currencies will give governments another tool to control inflation and interest rates. Payment and record keeping in digital currencies would be decentralized.
All these would be possible with the blockchain technology that powers digital currencies like Bitcoin.
New financial services infrastructure
In its ‘The future of financial infrastructure’ report last week which looked at how blockchain can reshape financial services, WEF noted that the technology has grown rapidly but significant hurdles remain to large-scale implementation.
This is despite that over US$1.4 billion has been invested in the technology over the past three years with more than 90 central banks engaged in its discussions worldwide while 80% of banks have been predicted to initiate blockchain-related projects by 2017.
The report has it, among others, that new financial services infrastructure built on blockchain will redraw processes and call into question orthodoxies that are foundational to today’s business models.
The Youtube video says the technology can help banks save on transaction fees with analysts predicting savings of up to $20 billion annually by 2022.