- Digital currency to address issues found in typical cryptos
With the news of most cryptocurrency market continuing in a bleeding position after the records seen in the past weeks, major central banks are now beginning to take a stand in the way of a central bank-backed digital currency as a way of joining the trend on the use of the digital asset in exchange among other uses.
A recent report has revealed that the United Kingdom’s Bank of England (BoE) in conjunction with the HM Treasury is planning to test the practicability of a central bank backed digital currency (CBDC) and noting that the name would be Britcoin. According to the report on Monday, the apex bank and treasury have formed a task force to work on the Britcoin project which is aimed at addressing the issues the conventional cryptos such as Bitcoin (BTC) has brought.
While the United Kingdom is not yet ready to roll out the central bank-issued digital currency, the launch of Britcoin will not replace cash and bank deposits if the bank sees that its plans go through but will co-exist with fiat currencies as a way to potentially simplify how businesses and individual customers make transactions. The report also revealed that Britcoin users would be allowed to hold accounts directly the English apex bank, edging out other non-central bank-backed digital currency while changing the role of banks in the country’s financial system.
In an announcement, the Bank of England (BoE) said, “The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK, and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.”
Jon Cunliffe, Deputy Governor of the Bank of England for Financial Stability, and Katharine Braddick, HM Treasury’s Director General of Financial Services, also stated that the task force which consists of two entities will monitor international CBDC developments to ensure the UK does not lag in global innovation.
The Bank also noted that other relevant authorities will be added in due course as it aims to foster the coordination between several agencies that will be involved in the said project. Also, it revealed that it seeks to organize the exploration of the objectives, applications, opportunities, and risks involved in issuing a CBDC.
Other roles include guiding the evaluation of the design features that a CBDC must have to achieve the country’s goals and supporting a rigorous, coherent and comprehensive assessment of the overall case for Britcoin.