According to a press release from the Bank of England (BOE), the UK is exploring the possibility and design of creating a digital pound – “Britcoin”, but the final decision on whether to create such a central bank digital currency (CBDC) will be made after this stage is completed.
The new development was proposed after a joint consultation statement was issued by the Bank of England and the UK Treasury, detailing the progress of the proposed digital pound and addressing public concerns about privacy and the continued use of cash. While the concept of CBDC has received support from various industries, the UK has not yet made a final decision on whether to further advance CBDC. The upcoming design phase aims to further explore the feasibility of “Britcoin” and its potential to bring convenience and innovation to individuals and businesses in everyday transactions.
To address privacy concerns that have been raised, the Bank of England asserts that any development towards “Britcoin” will involve significant legislation aimed at ensuring users’ privacy and control over their data. The Bank of England and the government will be prohibited from accessing this personal data, emphasizing users’ freedom in managing and spending their digital pounds.
Furthermore, the Treasury and the Bank reiterated their commitment to maintaining the traditional cash system, stating that the introduction of the digital pound would be a supplement to physical currency rather than a replacement.
The Economic Secretary to the Treasury, Bim Afolami, emphasized the importance of current currency and payment innovations, stating that even if the decision to implement the digital pound is made, the UK is ready to adapt to such changes.
The envisioned digital pound, according to the Bank of England, will have the same value as physical cash and will be jointly issued by the Bank of England, easily exchangeable with other forms of currency. In addition, access to the digital pound will be through digital wallets, used only for transactions rather than savings, will not accrue interest, and will have a personal holding limit. According to the roadmap set by UK authorities, the final decision on CBDC will be confirmed between 2025 and 2026.
While technically any country can quickly create a CBDC, the actual implementation often takes a long time due to the complex factors involving policy and changes in national currency. According to data from the Atlantic Council CBDC Tracker, as of January 2024, only 11 countries have fully launched digital currencies, with the vast majority still in the research phase.
On the other hand, CBDC in the United States has become a highly politicized issue due to the upcoming US election. According to previous reports by Zombit, Trump, during a public speech in New Hampshire on January 17, swore that if elected, he would never allow the US federal government to create a central bank digital currency (CBDC), describing the technical flaws in CBDC’s privacy as government tyranny. Trump stated in his speech: