The UK set to explore Britcoin, a Bank of England-backed CBDC
- Britcoin seeks to address the issues found in typical cryptocurrencies.
- While the UK is not yet ready to roll out a CBDC, its launch would not replace cash.
- More UK authorities are set to join BoE and HM Treasury in exploring the feasibility of Britcoin.
The United Kingdom is planning to test the practicability of a central bank-issued digital currency. A report unveiled this news on April 19, noting that the coin is named Britcoin. Reportedly, the Bank of England (BoE) joined hands with HM Treasury to form a task force to work on the Britcoin project, which aims to address issues found in conventional cryptos, such as Bitcoin (BTC).
According to the report, Britcoin will not replace cash and bank deposits if the bank sees its plans through. Instead, the CBDC will co-exist with fiat currencies to potentially simplify how businesses and individual customers make transactions. Reportedly, Britcoin would let users hold accounts directly with BoE and edge out other cryptos while changing the role of lenders in the UK financial system.
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However, the UK has not decided whether to launch a CBDC yet. In an announcement, BoE said,
The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.
More UK regulators set to join the CBDC task force
While the task force currently consists of two entities, BoE noted that other relevant authorities will be added in due course. At the moment, the task force aims to foster coordination between the various agencies that will be involved in the project. Moreover, it seeks to organize the exploration of the objectives, applications, opportunities, and risks involved in issuing a CBDC.
Co-chaired by Jon Cunliffe, Deputy Governor of the Bank of England for Financial Stability, and Katharine Braddick, HM Treasury’s Director General of Financial Services, the task force will also monitor international CBDC developments to ensure the UK does not lag in global innovation.
Other roles include guiding the evaluation of the design features that a CBDC must have to achieve the country’s goals and supporting a rigorous, coherent and comprehensive assessment of the overall case for Britcoin.
This news comes as most of the cryptocurrency market continues bleeding after setting record highs in the past week. After hitting an ATH of £46,339.82 on April 14, BTC, the leading cryptocurrency in market capitalization, is down 3.98% over the past 24 hours and 9.93% over the last seven days to trade at £39,202.75.