UK to Set up CBDC Taskforce to Analyze the Possibility of ‘Britcoin’

The Bank of England along with the British Government plans to set up a task force to create digital sterling, unofficially known as ‘Britcoin’. 

The central banks around the world are working to beat Big Tech by creating currencies based on blockchain. The task force has yet to determine whether Britain will actually be introducing a BoE-backed replacement of cash and electronic banking. However, no deadline has been announced for when the task force will be finalising its decision. 

This decision marks an improvement in the intensity and the pace of England’s preparation for the Central Bank Digital Currency (CBDC). The market players like RBA and Europe’s Central Bank have already gotten ahead with pilot projects and public consultation. 

“This doesn’t mark a rapid dive into setting up a rival to bitcoin. Far from it. As cryptocurrency investors ride a wave of speculation, the government will be keen to distance itself from what is still seen as the wild west of the payments world,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. “However, officials clearly believe they can’t ignore the surge of interest in digital currencies, as a means of faster and more efficient money transfers and there is also the threat hanging over central banks that unless they get their act together and enter the fray, digital currencies backed by Big Tech could end up being dominant in the future, especially as more societies drift towards being cashless.”

Australia’s National Bank’s director has also started to urge the country’s Central Bank to work on the plan to develop the digital version of the traditional currencies so that banks no longer have to opt for the more volatile private options. The director highlighted that if they do not build a CBDC, people will flock towards the unregulated alternative. It would be better to have a stable and secure token than to face the consequences of a volatile currency. 

A central bank-backed blockchain-based digital currency is a safer form of payment. This way, the value of the cryptocurrency is based on the value of an asset rather than a fluctuating value depending on the trading like bitcoin. 

The CBDC based systems have the potential to make payments cheaper, smoother, and more convenient. This diminishes the uncertainty and residual risk that are present in another digital form of payments and it also eliminates the hassle of liquid cash.