British Finance Minister Rishi Sunak told the Bank of England on Monday that they were looking into the case of the new “Britcoin”, or digital currency backed by major banks, aimed at addressing some of the challenges posed by crypto currencies such as bitcoin.
“We will launch a new group between Treasury and the Bank of England to oversee the Central Bank’s Central Bank (CBDC) audit function,” Sunak told a financial industry conference.
Shortly afterwards, Sunak tweeted the single word “Britcoin” in response to a statement from the finance ministry’s staff.
Some large banks are also looking at whether to establish digital currencies, actually expanding access to central bank funds that can only be used by commercial banks at present. This can speed up domestic and international payments and reduce the risks of financial instability.
China is a leading runner launching CBDC Last week the European Central Bank said it was learning about the electronic currency to fill banknotes and coins but any presentation is still several years away.
The BoE has said that digital sterling will not replace real money or existing bank accounts.
“The Government and the Bank of England have not yet decided whether to launch the CBDC in the UK, and will consult extensively with stakeholders on the benefits, risks and effectiveness of doing so,” the BoE said.
BoE Governor Andrew Bailey once said that bitcoin, a well-known cryptocurrency, failed to function as a value store or a more efficient way of making transactions, making it unsuitable to function as a currency and a risky bet for investors.
Central banks have also taken a closer look at Facebook’s efforts to establish its own digital currency.
However, cryptocurrensets received rising interest rates from mainstream financial institutions, and bitcoin achieved a record high of about $ 65,000 on April 14, ten times higher in the year.
Sunak, presenting the UK FinTech Week conference, has also announced other measures aimed at keeping London’s post-Brexit competition, which makes New York the world’s largest financial institution.
Since Britain’s departure from the European Union route on December 31, the financial sector has faced restrictions on serving EU customers.
Sunak has proposed removing the inherited heritage boundaries in the EU, including who can sell London shares and double the carpet of volume.
This will help Britain attract “black” or unknown trade by big investors after Amsterdam overthrew London as Europe’s leading trading center in January.
“The consultation process aims to deliver a fair, results-based and competitive competition, while ensuring that the UK maintains the highest standards of governance,” Sunak said.
Britain will also propose changes to corporate stock exchanges to ensure the rules are “not too burdensome”, Sunak said.