Britain is reportedly looking into a possibility of creating digital alternative currency for households and businesses.
The British finance minister has dubbed the initiative “Britcoin.”
As COVID-19 no doubt has changed almost every aspect of human activity, the use of cash fell during the coronavirus pandemic as people try to avoid contact, and several central banks across the world are considering whether to create digital money that would allow online payments without going through banks.
The Bank of England and Treasury announced Monday the creation of a Central Bank Digital Currency Taskforce to look into a potential UK CBDC.
“A CBDC would be a new form of digital money issued by the Bank of England and for use by households and businesses,” the central bank said in a statement.
“It would exist alongside cash and bank deposits, rather than replacing them,” it added.
Finance minister Rishi Sunak replied to a tweet of the announcement with the question “Britcoin?” – a play on words on the bitcoin cryptocurrency whose value has soared in recent months.
Unlike cryptocurrencies, which are out of the reach of state entities as they are issued in a decentralised and encrypted system, central banks would have control over digital money.
China is trying out its own digital currency in a pilot programme, while European Central Bank will decide this summer whether to move towards creating a digital euro.
The Bank of England said the CBDC task force will use a forum to look at the “practical challenges of designing, implementing and operating a CBDC”.
It will also consider the data and privacy implications of a digital currency.