UK’s central bank does not want the masses to confuse its CBDC with Crypto
On Tuesday, the Bank of England, the central bank of the United Kingdom, explicitly commented on its in-discussion central bank digital currency (CBDC) and said that they do not want to refer to the country’s CBDC as “Britcoin.”
The bank’s comments come in response to the wide usage of the term “Britcoin” by the British and international media – including CNN, ABC News, The Guardian, The Daily Mail, and many others. The resemblance to the term “Bitcoin” has brought concerns to the bank’s deputy governor, John Cunliffe, as the public might make unfavorable comparisons.
“The digital Pound can confuse people’s minds with crypto assets such as Bitcoin. I should take this opportunity to correct this misapprehension. Indeed, nothing could be further from the truth.”
He also presented his opinion of cryptocurrencies and said that most crypto assets are “highly speculative” and don’t have an intrinsic value. However, sources suggest that it is highly unlikely the global and, specifically, the British media will completely drop the term irrespective of the bank’s complaint.
On Tuesday, the British government started its four-month-long consultation process on the upcoming CBDC. Jeremy Hunt, the chancellor of the exchequer, and Andrew Bailey, governor of the Bank of England, say that the government could still decide against a CBDC; the consultation paper argues that a digital Pound will be needed at some point in the future.
If CBDC is launched, the British central banks hope consumers will use the digital Pound as an alternative to cash. The officials have said that the British CBDC could be in use by the end of this decade.
Several countries like China and Jamaica have already launched their CBDCs, whereas several nations have paced up their CBDC process, and the UK’s approach might put it years behind these nations.
The bank also expressed skepticism regarding the technology used to develop CBDC. It is still unsure whether to use Distributed Ledger Technology (DLT) for the CBDC. Other cryptocurrencies like Bitcoin and Ethereum use DLT.
Sources reveal that the CBDCs carry with them several privacy concerns. Digital currencies are controlled by a central state authority, giving governments access to all transaction data. They could have wide-reaching implications for tax fraud, money laundering, and criminal finance.
While the advent of Rishi Sunak as the prime minister of the UK had sparked high hopes among crypto enthusiasts, the nation seems to be maintaining a very cautious approach towards the asset.
However, Andrew Griffith, Member of Parliament and HM Treasury Economic Secretary, emphasized his dedication to the sector by calling it “the sector I have dedicated the most time to” during a UK Parliament Treasury Committee meeting. In the “long runtime” preceding the probable launch of a central bank digital currency (CBDC), Griffith predicted that a stablecoin would serve as the initial application of what is expected to be a wholesale settlement coin.
In addition, the nation is steadily taking up the process of developing its CBDC. In the first week of January, Todayq News reported the central bank asked applicants for a $244,000 contract to develop its proof-of-concept (PoC) CBDC wallet to offer questions regarding the initiative. The bank responded by publishing its replies to more than 70 queries.