United Kingdom: The Treasury and the Bank of England have revealed that a state-backed digital pound as an alternative to cash is likely to be launched later this decade.
According to the report, the government is speeding up its response to the rise of privately issued cryptocurrencies and stable coins with a four-month public consultation process on a “Britcoin.”
After the volatility of cryptocurrencies and the collapse of the crypto exchange FTX, the Bank and the Treasury will seek to reassure the public that a state-backed digital currency would be as safe as cash.
Furthermore, the officials will explore the technical issues involved in creating a central bank digital currency before a final decision is taken by the middle of the decade.
Mr. Jeremy Hunt, the Chancellor of the exchequer, and Mr. Andrew Bailey, the Governor of the Bank of England, remarked that the government could still decide against going ahead, but momentum is building behind the idea. The consultation paper further argues that a digital pound will be required at some point in the future.
“While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that’s trusted, accessible, and easy to use. That’s why we want to investigate what is possible first, while always making sure we protect financial stability,” Mr. Hunt shared.
Mr. Bailey noted that “as the world around us and the way we pay for things becomes more digitalised, the case for a digital pound in the future continues to grow. A digital pound would provide a new way to pay, help businesses maintain trust in money, and better protect financial stability.
“However, there are a number of implications that our technical work will need to carefully consider. This consultation and the further work the Bank will now do will be the foundation for what would be a profound decision for the country on the way we use money,” the Governor added.
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