Although a few days ago a series of reports have claimed that the Bank of England is looking into the possibility of launching its own cryptocurrency, it appears now that the plan was dropped. FT Advisor reported that the Bank of England has already taken this decision, so a cryptocurrency will no longer be in plans.

Why did the Bank of England drop cryptocurrency plan?

Media reported that the main reason why the Bank of England took this decision is linked to the fact that it wants to make sure that it will avoid all potential negative impact on the financial system. According to the Bank of England, releasing its own cryptocurrency would negatively affect traditional banks. In fact, the bank believes that such a cryptocurrency will be very successful.

Maybe too successful. According to the Bank of England, customers would most likely go for its cryptocurrency, which means that traditional banks will have to suffer. The Bank of England believes that people would choose its cryptocurrency over paper money or bank accounts, which would no longer be used.

The central bank feared that if customers would withdraw their funds from traditional banks, banks would be in the impossibility to make payments and the whole economy would be affected. The central bank also expressed concern on whether it would be able to keep financial stability.

Previous media reports indicated that the Bank of England started researching the cryptocurrency market in 2015. Initially, the bank was considering to release its own digital currency and was gathering information for that purpose. Reportedly, the bank will continue to look into the market, although a cryptocurrency will not be launched.

However, the Bank of England considers cryptocurrencies to be not dangerous for the country's economy, saying that they do not pose a threat. Previously, the Governor of the Central Bank claimed that a cryptocurrency released by the bank would be very beneficial.