The advancement of digital currency in the UK: case study Britcoin
Finance minister, Jeremy Hunt hinted on February 7th, that the Bank of England and Treasury are seeking feedback on if they should proceed with building a Central Bank Digital Currency (CBDC). The CBDC is a digitized payment system that doesn't replace the use of cash.
According to him, a digital currency backed by the BoE could be another trusted means of transaction and payment.
As of April 2021, the BoE under the directive of the then Finance minister and Current Prime Minister, Rishi Sunak, a task force had been set up to oversee the potentials of the implementation of the digital pound. This led to the posting of a job listing on Jan 24th calling for team leads and a Fintech team of roughly 20 people.
Considering the rise in the number of stablecoins, the BoE and Treasury, issued a paper on Feb 7th, stating that the digital pound, nicknamed Britcoin, can co-exist in the mixed payment system. The paper also indicated that the need to keep the UK's central bank money as an anchor for confidence and safety is the primary motivator behind launching the digital pound.
While modalities are being put in place, the BoE and Treasury are hoping to have the digital pound launched by 2025.
To ease payments, retail systems would largely adopt the digital pound through a public-private partnership. Users of the digital pound will connect to the core ledger through private sector -run API.
Some level of privacy concerns have been raised by the Crypto community and were duly acknowledged by the BoE and assured that transactions would be recorded anonymously on the core ledger thereby upholding some form of privacy.