The United Kingdom has announced the creation of a Central Bank Digital Currency Working Group (CBDC) to coordinate a study of a potential British central bank. This was announced jointly by Bank of England and HM Treasury. The new CBDC will be a new form of digital money issued by the Bank of England for household and business use. It will co-exist with money and bank deposits and will not replace them. Chancellor Rishi Sunak turned to Twitter to jokingly suggest that the new digital currency could be called “Britcoin”.
Of course, this is not the official name of the digital currency and the implementation of the CBDC is currently still under investigation. A special working group of HM Treasury and the Bank of England has been set up specifically for this purpose. In an official statement Bank of England he says“The Government and the Bank of England have not yet decided whether to introduce CBDC in the UK and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.”
This is happening as interest in cryptocurrencies continues to peak with Tesla $ 1.5 billion purchase (approximately 10,920 crores) of bitcoin in February. Other cryptocurrencies like Dogecoin are also seeing a massive leap in a short period. Chancellor Rishi Sunak is joking tweet that the digital currency in the United Kingdom could be called ‘Britcoin’ when it was released.
For the time being, the task force aims to ensure that a strategic approach is adopted between the UK authorities as they examine the CBDC, in line with their legal objectives, and to promote close coordination between them. The team should investigate the purposes, uses, opportunities and risks of a potential CBDC in the United Kingdom. It will design the characteristics that the digital currency should show and “monitor the development of international CBDCs to ensure that the UK remains at the forefront of global innovation”.
This new team of the CBDC working group will be co-chaired by the Deputy Governor for Financial Stability at the Bank of England, John Kunliff, and the Director General of the Treasury Department, Catherine Braddick. In addition, a CBDC Engagement Forum and a CBDC Technology Forum will be established to engage stakeholders and gather input on all technological aspects of CBDC from a diverse sector of expertise and perspectives. The forums will play an important role in helping to understand the technological challenges in the design, implementation and operation of CBDC.