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‘Britcoin’ suspended as Bank of England considers blockchain technology
Britcoin is still under discussion at the Bank of England, according to a speech on Monday. (Aaron Chown, PA Images)
A Bank of England official stressed that the bank has no plans to roll out a digital pound, while touting the potential benefits of tokenization, in a speech on Monday. Bank of England deputy governor Sarah Breeden said consultation on what has been dubbed by the press as ‘Britcoin’ is underway, with an exploration of central bank digital currencies (CBDCs) a potential part of the future of digital payments in the UK.
In April 2021, The Bank announced it would launch a working group in conjunction with the Treasury to explore the viability of a digital pound. At the time, the Bank said any CBDC would be a new form of digital currency that could be used by households and businesses. It would exist alongside cash and bank deposits and not replace them.
The Bank has also previously stated that if it were to launch a CBDC, it would not be until the end of the decade. She sees one of her biggest risks as the potential for digital currency to undermine trust in money, payments and the entire financial system.
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“Our work over the next two years will be focused on providing a robust and objective assessment of potential benefits and costs, including operational and technical feasibility,” Breeden said Monday. “To do this, we will look in more detail at the potential design of a digital book, informed by technology experimentation and proofs of concept with the private sector.”
At the same time, the Bank is closely studying the possibilities offered by distributed ledger technology (DLT) and tokenization.
This technology has the “potential to deliver greater efficiency and functionality for retail and wholesale payments in the “real world,” Breeden said. “This innovation is important to our role in maintaining monetary and financial stability, and also has the potential to deliver significant benefits to customers and businesses, economic activity and growth.”
DLT could facilitate “faster and more efficient processes with fewer intermediaries,” she added, explaining that tokenization has the potential to increase liquidity across a wider range of financial assets.
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