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The UK has joined the suite of countries looking to roll out a Central Bank Digital Currency, courtesy of the Bank of England.
The Bank of England has announced its plans to test the practicability of a central bank digital currency, named Britcoin. According to the report, Britcoin seeks to address the issues found in typical cryptocurrencies. The Bank of England reportedly joined hands with HM Treasury to form a task force to work on the Britcoin project, aiming to address issues found in conventional cryptos, such as Bitcoin (BTC).
However, 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. Britcoin would also allow users to hold accounts directly with the BoE and edge out other cryptos while changing the role of lenders in the UK financial system.
According to the announcement, the UK has not decided whether to launch a CBDC yet:
“The Government and the Bank of England have not yet decided on whether to introduce a CBDC in the UK yet. But they will engage widely with stakeholders on the benefits, risks, and practicalities of doing so.”
Although the task force currently consists of two bodies, the Bank of England noted that it would add other relevant authorities in due course. The task force aims to foster coordination between the various agencies that will work on the project. Moreover, it seeks to organize the exploration of the objectives, applications, opportunities, and risks involved in issuing a CBDC.
The task force is 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 and interoperability.
Besides that, the task force will monitor the evaluation of the design features of an ideal CBDC to ensure the country achieves its goals. They will also ensure a rigorous, coherent, and comprehensive assessment of the overall case for Britcoin.
Meanwhile, this is just an addition to the rollercoaster of events in the crypto industry — such as coins reaching an all-time high, more companies investing in Bitcoin, and individuals realizing more use-cases for cryptocurrencies.