The Treasury has announced it will have until 2025 to decide whether to introduce a so-called “Britcoin” digital pound, after a consultation paper found it “may be required in the future”.
Creating digital forms of money has always been a theme consultation paperMonday by the Ministry of Finance and bank of england Decide whether to implement a digital pound around mid-century.
The Treasury said the decision would be largely based on future developments in currency and payments.
As part of the Bank’s ongoing research and development, the public is now invited to comment on the digital pound.
Unlike other cryptocurrencies such as Bitcoin, the underlying Britcoin would be issued by the Bank of England rather than the private sector.
Unlike cryptocurrencies, tokens have an intrinsic value tied to the British pound.
The Treasury said the needs of vulnerable groups were being considered during the design process to ensure Britcoin was easy to use and understood and trusted as a form of money.
The Treasury said that if a digital pound was introduced, the amount of Britcoin people could hold would be limited during the introduction phase to strike a balance between encouraging usage and managing risk.
Among those risks, it added, is the potential for large and rapid outflows of bitcoin from bank deposits.
The digital pound would work like paper money, as it would be issued and controlled by the Bank of England, and would be interchangeable with cash and bank deposits.
Currently digital currency is only issued to banks, not the general public, but with digital currency it is possible to send digital currency without the need for a bank account.
Speaking on Ian King Live in June 2021, Sir Jon Cunliffe, co-chair of the banking and treasury working group, said using Britcoin could be a cheaper and easier than card transactions.
“They do offer the potential to reduce costs,” he told Ian King.
“Currently, I think the average cost of a credit card transaction is around 0.5% plus, but of course if you’re a small tea shop in Shoreham-on-Sea you’re going to pay even more than 1% of that transaction in some cases.
“So it might be cheaper, it might be more convenient. These new forms of money offer the ability to integrate more with other things through software. So you can think of smart contracts where the money will be programmed to ‘only when certain things happen. was released when things happened. For example, you might consider giving kids pocket money, but program the money not to be spent on candy. “
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Responding to the statement, Shadow Cities Minister Tulip Siddiq said: “We fully support the Bank of England’s work to explore the potential benefits of a secure and stable central bank digital currency.”
“This is in stark contrast to the crypto wild west promoted by the Conservative government, which puts millions of people’s savings at risk,” she said.
“A Labor government will get serious about attracting fintech companies to the UK by safely harnessing the potential of new technologies and our ambition to make the UK a home-grown startup hub in the world.”