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United Kingdom making progress with its own CBDC dubbed "Britcoin"

The Bank of England believes that the digital pound has the potential to increase financial inclusion among the population in the United Kingdom

Shashank Bhardwaj
Published: Feb 9, 2023 08:17:36 PM IST
Updated: Feb 10, 2023 01:49:17 AM IST

United Kingdom making progress with its own CBDC dubbed "Britcoin"Image: Shutterstock

The United Kingdom is making progress towards introducing its own central bank digital currency (CBDC), referred to as "Britcoin" by the public. 

On February 7th, the Bank of England and the UK Treasury released a consultation paper detailing the plans for the digital pound. Additionally, a technology working paper was also published, exploring the technical and economic aspects of the design.

The consultation paper states that despite the increasing popularity of privately-issued stablecoins, CBDCs, like the digital pound, can coexist in a "mixed payments economy." It does not have to be the dominant form of currency, similar to how cash can exist alongside private money. The digital pound can coexist with other forms of money, including stablecoins.

The Bank of England and the Treasury aim to introduce the digital pound by 2025, if possible; however, they are not yet certain if it will actually be launched. 

The consultation paper stated that while they believe a digital pound is likely to be required in the UK, no final decision has been made at this time.

The main reason for launching the digital pound, according to the consultation paper, is to maintain the authority of central bank money as a source of confidence and security in the UK's monetary system, as well as to improve innovation, options, and efficiency in domestic payments.

For the digital pound to effectively serve its purpose, widespread adoption in the retail sector must be achieved through partnerships between the public and private sectors. For the digital pound to serve the same role as cash in supporting the monetary system, it must be widely used by both individuals and businesses.

The Bank of England believes that the digital pound has the potential to increase financial inclusion among the population in the UK.

Individuals will be able to access the digital pound by connecting to a private sector-run API, which will then connect to the central ledger.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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