New stories about central bank digital currencies (CBDCs) continue to make the news, and this week the United Kingdom appears poised to jump on the CBDC bandwagon. U.K. Treasury insiders have confirmed that a task force has been established to explore how the CBDC, which some dubbed as ‘Britcoin,’ might work. The task force will report its findings to Chancellor Rishi Sunak by the end of the year.
U.K. considers a potential CBDC.
According to the sources who leaked the story to the Daily Mail, U.K.’s government’s plan has greater enthusiasm among treasury members than it does with bankers. There is both opposition to and enthusiasm for this digital currency project within the British government. Some see the obvious benefits of a fully digital currency. Faster transfers, the ability for the central bank to distribute “helicopter money,” reduced friction and costs for small businesses, and the biggest modernization of the British financial system in centuries have some decision-makers enthusiastic about the potential of a digital Pound Sterling.
Central banks across countries explore CBDCs.
Details on the U.K.’s CBDC project are not readily available. However, like most other CBDCs, it will likely require a digital wallet to store and use. Britain has recently experienced a political row over the potential issuance of vaccine passports, so it’s unclear how willingly the British public would accept a digital wallet if it were to be issued by the U.K. government. The issuance of any wallet linked to digital I.D.s could also inflame already simmering political tensions. The issue of privacy among citizens has been of major concern when it comes to digital currencies. Countries including the USA, Canada, Russia, and many others are actively exploring CBDCs.