British finance minister Rishi Sunak has called the Bank of England to look into a case of ‘Britcoin’ or central bank-backed digital currency, according to Reuters. The digital currency aims at tackling some of the challenges posed by cryptocurrencies.
A Bank of England digital version of sterling would allow businesses and consumers to sidestep others when making payments, upending the lenders’ role in the financial system.
Other central banks are also looking to set up digital versions of their own currencies, widening access to central bank funds.
The move towards digital currencies could speed up domestic and foreign payments and reduce financial stability risks.
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.
China is a front-runner to launch CBDC, as the European Central Bank said it is studying an electric form of cash to complement banknotes and coins.
Central banks also took a dim view of efforts by Facebook to set up its own digital currency, even as cryptocurrencies received growing interest from mainstream financial institutions.Bitcoin is currently declining BTC: USD is down 1.19%
