Chancellor Rishi Sunak has announced a case for ‘Britcoin’, a central bank-backed digital currency which would aim to tackle some of the challenges posed by cryptocurrencies such as Bitcoin.
The Bank of England’s (BoE) digital version of sterling would potentially allow businesses and consumers to hold accounts directly with the bank but would not replace physical cash.
‘Britcoin’ could widen access to central bank funds which only commercial banks can use at present, speeding up domestic and foreign payments and reducing financial stability risks.
The new digital coin could look to compete with Bitcoin and other cryptocurrencies as they continue to receive interest from mainstream financial institutions.
Bitcoin is built on the blockchain and is totally unregulated, meaning it is not affected by the economy, inflation or exchange rates.
The creation of this cryptocurrency would be matched with Minister Sunak’s proposed removal of certain financial restrictions put in place by the EU as the UK prepares to leave.