'Bitcoin' not bitcoin? UK considers new digital currency

Britain's Chancellor of the Exchequer (finance minister) Rishi Sunak attends a virtual press conference inside 10 Downing Street in central London, Britain March 3, 2021. Tolga Akmen/Pool via REUTERS

British finance minister Rishi Sunak told the Bank of England on Monday to look at the case for a new "Bitcoin", or central bank-backed digital currency, aimed at tackling some of the challenges posed by cryptocurrencies such as bitcoin.

A BoE-backed digital version of sterling would potentially allow businesses and consumers to hold accounts directly with the bank and to sidestep others when making payments, upending the lenders' role in the financial system.

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

Soon after, Sunak tweeted the single word "Bitcoin" in reply to the finance ministry's announcement of the task force

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 speed up domestic and foreign payments and reduce financial stability risks.

China is a front-runner to launch a CBDC. Last week the European Central Bank said it was studying an electronic form of cash to complement banknotes and coins but any launch was still several years away.

The BoE said a digital version of sterling would not replace either physical cash or existing bank accounts.

"The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK and will engage widely with stakeholders on the benefits, risks, and practicalities of doing so," the BoE said...

BoE Governor Andrew Bailey has previously said bitcoin, the best known cryptocurrency, fails to act as a stable store of value or an efficient way to make transactions, making it ill-suited to serve as a currency and a risky bet for investors.

Central banks also took a dim view of efforts by Facebook to set up its own digital currency.

Even so, cryptocurrencies have received growing interest from mainstream financial institutions, and bitcoin hit a record high of nearly $65,000 on April 14, up tenfold in the space of a year.

DARK TRADING

Sunak, launching the UK FinTech Week conference, also announced other measures aimed at maintaining the post-Brexit competitiveness of London, which vies with New York to be the world's largest financial center.

Since Britain's departure from the European Union's orbit on Dec. 31, the financial sector has faced restrictions on serving EU customers.

Sunak proposed removing restrictions inherited from the EU, including who can trade shares in London and the double volume cap.

This would help Britain attract more "dark" or anonymous trading by big investors after Amsterdam toppled London as Europe's top share trading center in January.

"The consultation process aims to deliver a rulebook that is fair, outcomes-based, and supports competitiveness, whilst ensuring the UK maintains the highest regulatory standards," Sunak said.

Britain would also propose changes to companies' share prospectuses to ensure the rules are "not overly burdensome", Sunak said.

News Source: reuters

Category and Tags
More stories by
Bangladesh, China to elevate ties to new height

BEIJING, March 28: China and Bangladesh have decided to elevate their relations to a new height after a historic bilateral meeting between President Xi Jinping and Chief Adviser Professor Muhammad Yunus.The meeting held at the Chinese capital's Great

How to Earn Money with Cryptocurrency ?

Cryptocurrency has emerged as a lucrative way to make money, attracting both investors and traders worldwide. Wh...

London Buses to Carry ‘Praise Allah’ Adverts During Ramadan

Islamic Relief, the UK's largest Muslim charity, launched an advertising campaign featuring the phrase "Subhan Allah" ("Glory be to God") on hundreds of buses across cities like London, Birmingham, Manchester, Leicester, and Bradford. This initiative

Top 10 Cryptos You Should Buy in 2025

As we progress through 2025, the cryptocurrency market continues to evolve, presenting both seasoned investors and newcomers with a plethora of opportunities. Identifying cryptocurrencies with strong fundamentals, innovative technologies, and substan

How Much Water Should You Drink Every Day in Ramadan?

Photo: ShutterstockRamadan is a sacred month observed by Muslims worldwide, marked by fasting from dawn to sunset. During this time, no food or drink is consumed throughout daylight hours, making hydration a key conc...

Follow Business Habit on Facebook, Twitter