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UK looks into creating its own cryptocurrency with ‘Britcoin’ initiative

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Britain is looking into the possibility of creating a digital currency that households and businesses could use instead of cash -- an initiative the finance minister dubbed “Britcoin”.

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The use of cash has fallen 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 with cryptocurrencies, which are out of the reach of state entities since they are issued in a decentralized and encrypted system, central banks would have control over digital money.

China is trying out its own digital currency in a pilot program, 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.

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