The Bank of England and the Treasury is working to create a central bank digital currency called “Britcoin” that may launch within the next decade.
According to Private Banker International, “in response to the rise of privately issued cryptocurrencies and stablecoins,” the government has issued a four-month public consultation process.
With so many private cryptocurrencies and stablecoins entering the market, yet experiencing worrisome volatility and crypto crises, such as the collapse of FTX, it makes perfect sense for the government to consider a digital currency backed by the central bank.
The Antithesis of Crypto
Britcoin will be “reliable and retain its value over time,” according to the Bank of England—a contrast to the ever-fluctuating cryptocurrencies.
This initial interest from the UK government doesn’t come as a surprise. Many governments around the world are developing their own digital currencies to facilitate electronic payments and transfers for both consumers and businesses. What’s more, as more cryptocurrencies enter the market, many are just linked to existing digital currencies, such as Bitcoin, leaving users vulnerable to extreme volatility. As more digital currencies pop up, The Bank of England is rightly concerned about its position and adeptness in steering its economy.
A Host of Benefits with Britcoin
The Bank of England sees many benefits to developing its own digital currency. Aside from making transactions faster and more affordable, micropayments for services can also be delivered affordably, in a more automated payment system. It also opens the doors to more business models.
While the launch of Britcoin is still very much up in the air, whether or not it’ll be beneficial—if it does launch down the line—will depend on the amount of regulation that takes place in space, along with how dependable these exchanges can be as financial partners.
One thing is certain, The Bank of England is making its way into the digitalization of banking.