The UK Treasury and the Bank of England are committed to supporting the development of the country’s central bank digital currency. The respective currency is popularly known by the names “digital pound” or “Britcoin.” In 2021’s April, discussions were started related to a CBDC project to be carried out by the United Kingdom.
UK Treasury and Bank of England to Back a CBDC to Be Launched in Future
At present, under Rishi Sunak’s leadership, the UK Treasury has released a mutual task force in collaboration with the Bank of England.
The purpose of that group would be to assess the possibilities related to a digital pound’s launch for the households and businesses operating within the jurisdiction of the country. Since that time, a lot of discussions have been carried out on the topic.
Several reports have been made by both the financial entities of the UK regarding the likely risks and benefits offered by a digital pound to the economic atmosphere of the country.
In recent months, a lot of consultations and research have been performed on the feasibilities related to such a project. It is expected that both entities would eventually decide in this respect.
Andrew Bailey (the governor of the Bank of England) and Jeremy Hunt (the Chancellor of the Exchequer) will expectedly support the launch of a digital currency that would be supported by the state. The respective currency would decrease the utilization of cash across the jurisdiction of the United Kingdom as the world is witnessing evolution and turning into a digital and cashless economy.
In line with the work done on the digitization of the economy, the UK Treasury and the Bank of England consider that a digital pound’s release will be required in the future, as per the chancellor and governor.
He mentioned this in a consultation report, according to The Telegraph. The news outlet referred to anonymous sources while reporting this.
Another statement noted in the respective consultation report disclosed that the current time would be very early to develop the infrastructure covering a project dealing with a digital pound. Nonetheless, it was disclosed that additional preparatory work on the matter is justified.
As mentioned by the news outlet, the financial authorities of the United Kingdom will openly present their viewpoint in the coming week.
They will additionally offer a roadmap to pave the way for an effective launch of a digital pound by the year 2030 to operate within the jurisdiction. Up till now, after the report by the news outlet, no official remarks have yet been made by anyone of the UK Treasury or the Bank of England.
As implied by the title, a central bank digital currency (or CBDC) plays the role of a digital token powered by the central bank of a country.
CBDCs are established with the use of blockchain technology. They provide the same functions and value as the traditional currencies of the relevant countries. Several businesses and citizens in England are enthusiastic about the concept of a digital pound’s release.
The Digital Pound Will Operate in Parallel with the UK’s Traditional Currency
But, a lot of apprehensions still exist regarding the respective financial move’s implications. However, the Bank of England has frequently mentioned that the digital pound will not replace the fiat currency. As per it, the project will operate in parallel with the conventional currency of the country.