The Bank of England and the Treasury are due to present the idea of a CBDC “digital pound” in the roadmap to be launched next week.
The #currency of the central bank, dubbed “Britcoin”, can be used by 2030 and will be traded along with the traditional physical currency. Despite this, there are fears that the physical currency will eventually be disposed of.
TheBank of England's perception of CBDC
Andrew Bailey, governor of the Bank of England, and Chancellor Jeremy Hunt will lead the launch of the digital pound two years after Prime Minister Rishi Sunak set up a task force to explore a central bank digital currency (CBDC).
The Bank of England and the Treasury believe that a digital pound is needed in the future, however, it is still too early to build the necessary infrastructure.
The Bank of England is currently creating digital money by issuing new reserves at commercial banks, but the CBDC will allow the bank to issue digital currency directly to individuals and businesses.
Britcoin will be issued by the Bank of England and will have the same value as its equivalent in physical currencies.
The bank and the Treasury will launch a four-month consultation session in which the public, academics and companies will be invited to share their views on the launch of the digital pound.
It is worth mentioning that the government passed legislation last year to protect cash, and the bank has previously stated that the digital pound will be next to the physical currency and does not replace it.
The bank and the Treasury will begin the “design” stage of the project, which will include the development of a scheme for the creation and use of the digital pound.
Discussion about the digital pound Bitcoin
While the Bank of England believes that CBDC will strengthen competition and ensure that the market is not dominated. However, Lord King, the former governor of the Bank of England, noted that #CBDC has “risks but no obvious benefits”.
Lord King warned that the introduction of CBD could lead to state control of people's spending choices or even financial instability during periods of economic stress.
The Lords Economic Affairs Committee report also warned that the introduction of CBD could lead to more government monitoring of people's spending choices, or fiat currency could eventually be phased out.