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UK May Launch Its Digital Currency 'Britcoin' The proposed digital currency would be denominated in pounds, with 10 pounds of digital currency always equal to a 10-pound note

By Teena Jose

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UK authorities, on Monday, said that British businesses and consumers are likely to get a digital version of the pound while formally asking for a public opinion on the idea of introducing a central bank digital currency.

Backed by the central bank, the new currency would be reliable and retain its value over time, in contrast to cryptocurrencies that can fluctuate wildly and threaten the holdings of investors, the Bank of England says on its website.

The proposed digital currency would be denominated in pounds, with 10 pounds of digital currency always equal to a 10-pound note. Held in a digital wallet, the currency could be used to pay for goods and services electronically, the Bank said.

Treasury chief Jeremy Hunt, in a news report was quoted as saying, "While the cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that's trusted, accessible and easy to use. That's why we want to investigate what is possible first, whilst always making sure we protect financial stability."

Taking public input comes after the Treasury and the Bank of England announced two years ago that they were considering launching a digital currency.

According to a Reuters report of April 2022, the British finance minister Rishi Sunak had told the Bank of England to look at the case for a new "Britcoin", or central bank-backed digital currency, aimed at tackling some of the challenges posed by cryptocurrencies such as bitcoin. While Prime Minister Rishi Sunak suggested naming the initiative "Britcoin" when he was Treasury chief, the Bank of England has stressed that the potential currency shouldn't be confused with cryptocurrencies like Bitcoin.

"We're launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency (CBDC)," Sunak had reportedly told a financial industry conference last year.

Other central banks are also looking at whether to set up digital versions of their own currencies, essentially widening access to central bank funds which only commercial banks can use at present. This could possibly speed up domestic and foreign payments and reduce financial stability risks. According to a PwC consultant, cited in a Mint report, more than 80% of the world's central banks are considering launching digital currencies or have already done so.

Digital currency is any currency, money or money-like asset that is primarily managed, stored or exchanged on digital computer systems. It exhibits properties similar to traditional currencies but does not have a classical form of flat currency historically which can be held in your hand.

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.
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