Bank of England Developing Crypto-Currency
Bank of England developing cryptocurrency in house.
A new cryptocurrency is being developed by Bank of England. Bank of England which is also England’s central bank has announced plans to launch its own Bitcoin-like cryptocurrency named RSCoin. It is said it will function on the same blockchain ledger technology that powers Bitcoin.
Bank of England‘s cryptocurrency creates a form of digital cash that supposedly cannot be tampered with or counterfeited. RSCoin was originally designed by two researchers at University College London, which works very similar to Bitcoin but allows for a lot more centralized control. The researchers stated that they have tested RSCoin on 30 servers inside Amazon’s cloud computing service. Now, the researchers are in talks with the BoE on how to implement this system across the financial channels.
England’s central bank would be the sole entity controlling this distributed ledger, and would also be in the possession of a special encryption key. This key is designed to allow the bank to add or subtract cryptocurrency from the ledger, as a way to control the blockchain’s total size and to follow national and international financial regulations put in place after the most recent 2008 financial crisis.
RSCoin Difference from BTC is Centralized Authority
The new initiative by Bank of England is an interesting undertaking, however, a few key issues remain. RSCoin’s supply will be controlled by the bank which can harm its valuation. Also, some experts feel, that this can give powers to certain individuals in BoE to artificially manipulate the rates acting in their own best interests, instead of doing what’s good for the fate of the crypto-currency.
RSCoin Still in Early Developmental Stages
The key difference between RSCoin and Bitcoin being, bitcoin is a fully decentralized digital currency, accessible to everyone in the world outside of banking channels. RSCoin currently is only a research proposal, but it’s interesting to speculate on whether it could become an official project of the BoE, as previous veiled but clear statements by the central bank seems to indicate.
Moving forward in the Cryptocurrency Realm
It remains to be seen whether a controlled cryptocurrency like RSCoin can gain similar traction as Bitcoin. The takeaway here is that a central bank developing it’s own cryptocurrency shows how seriously this whole space is being taken even by “establishment organizations” such as central banks of major nations. The fact that a nation as powerful and established like the United Kingdom’s central bank is interested in developing a cryptocurrency of their own shows the legitimacy and impact Bitcoin is having across the world.
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