The Economic Affairs Committee of the House of Lords (Parliament's upper house) recently held a meet to discuss blockchain and distributed ledger technology.

Witnesses to the meeting included the likes of Ben Broadbent, Deputy Governor, Monetary Policy, Bank of England; Blythe Masters, Chief Executive Officer, Digital Asset Holdings; Simon Taylor, Co-Founder / Director of Blockchain, 11:FS; Gresham College professor of commerce Michael Mainelli; Imperial College Centre for Cryptocurrency Research associate director Dr Catherine Mulligan; and PwC transformation and assurance director Lord Spens.

Broadbent started off saying that blockchain and distributed ledger technologies are currently in infancy. When asked about the possibility of central bank digital currency (CBDC), he said that it is “a long way off” due to technological barriers along with the fact that it would require major restructuring of the entire financial system, ARS Technica reported.

"If you are talking about an all-singing, all-dancing central bank digital currency, replacing not just the liabilities we currently handle, but prospectively substituting it for commercial money then yes, that is a long way off," Broadbent said. "That is not just about technology; that would be a matter for the shape of the financial system."

In this context, the meeting also discussed the recently published paper by the Bank of England that said that that CBDC issuance of 30% of GDP, against government bonds, could permanently raise GDP by as much as 3%, due to reductions in real interest rates, distortionary taxes, and monetary transaction costs.

He went on to say that bitcoin has huge deficiencies as a currency. Emphasizing on the importance of trust, he said “central bank is always trusted, central bank money is always trusted”, adding that he would place the central bank as the ultimate clearer and settler, when compared with the permissionless bitcoin system.

Broadbent was more optimistic about blockchain technology and its application in the banking system. He said:

“When you think of things on these scales, the benefits are clear and quite large, and so are the costs. And what I was really trying to say is, even though this is a very new technology, I think it's possible, once you think through, to realise that some of the big questions involved are very old, not to say ancient.”