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Bank of England launches task force on digital currency

Rishi Sunak referred to the currency as ‘Britcoin’

UK households could be using digital pounds to pay for goods sooner rather than later as the Treasury and the Bank of England (BoE) revealed plans to set up a task force to look into the idea.

A central bank digital currency (CBDC), which would sit alongside cash and bank deposits, could offer an alternative method of receiving and making payments.

While CBDC could be underpinned by blockchain technology, according to The Times, it would also be pegged to the pound, and therefore much less volatile than cryptos such as bitcoin.

No decision has been made to introduce the currency, however, authorities have begun looking into the advantages.

Some of which included a more resilient payments system, faster payments and the provision of a government backed alternative to a future currency developed by the private sector.

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The task force will be jointly chaired by Sir Jon Cunliffe, deputy governor at the BoE, and Katharine Braddick, the Treasury mandarin responsible for financial services, while the BoE will also establish a CBDC division.

The BoE confirmed that if a central bank digital currency were introduced, it would be denominated in pounds sterling, like banknotes, “so £10 of CBDC would always be worth the same as a £10 note . . . Any CBDC would be introduced alongside — rather than replacing — cash and bank deposits.”

In a report released last month, the BoE suggested that the new medium would provide stability as an alternative payment main plumbing for card payments was hit by an outage, The Times reported.

Jason Cozens, founder of Glint, which lets users make and receive electronic payments backed by physical gold, said: “This is the clearest indication yet that the Bank of England is looking to control or, better yet, crush the rise of alternative currencies.”

He warned that CBDCs were still tied to the performance of national currencies and “subject to the same external factors that erode our purchasing power and the value of our cash and savings”.

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