Britcoin? Rishi Sunak says Treasury and Bank of England to explore central bank

The prospect of a digital UK currency appeared to take another step forwards on Monday after Chancellor of the Exchequer Rishi Sunak launched a joint project between the Treasury and the to explore the potential of a central bank digital currency (CBDC)

Speaking at the Fintech Week conference on Monday, Sunak unveiled the creation of the new ‘taskforce’ alongside a CBDC engagement forum and a CBDC technology forum that have been created to engage technical experts and key stakeholders in the process of potentially establishing a CBDC.

READ: Bitcoin recovers some ground after weekend flash crash

The taskforce will be co-chaired by the deputy governor of the , Jon Cunliffe, and the Treasury’s director general of financial services, Katharine Braddick.

The Chancellor also said that in order to support private sector innovation, firms exploring technologies such as distributed ledger (DLT) to improve financial market infrastructure will have access to a new sandbox, while the Bank of England has also launched a new ‘omnibus’ account to allow access to innovative financial market infrastructure providers that can “support delivery of faster, cheaper, 24-hour wholesale payment and settlement using central bank money”.

Britcoin? #UKFW21 https://t.co/Slk5lwUvrV

— Rishi Sunak (@RishiSunak) April 19, 2021

“The steps I’ve outlined today, to boost growing fintechs, push the boundaries of digital finance and make our financial markets more efficient, will propel us forward. And if we can capture the extraordinary potential of technology, we’ll cement the UK’s position as the world’s pre-eminent financial centre”, Sunak said in a statement.

The taskforce forms part of a package of measures that the Treasury said are aiming to build on opportunities generated following Brexit, as well as to build on the UK’s “competitive advantage in fintech”.

Sunak also confirmed that the government will consult on changes to the UK’s stock market listing regime in order to provide “a further boost for innovative companies seeking to raise money in the UK”.

‘Britcoin’ could bring fresh volatility for crypto markets, analyst

‘’Until now, government and the Bank of England have maintained a hands-off approach, but now they are dipping their toes into the opaque waters of digital currencies by exploring the potential for ‘Britcoin’”, said Susannah Streeter at Hargreaves Lansdown.

“This doesn’t mark a rapid dive into setting up a rival to Bitcoin. Far from it. As cryptocurrency investors ride a wave of speculation, the government will be keen to distance itself from what is still seen as the wild west of the payments world. However, officials clearly believe they can’t ignore the surge of interest in digital currencies, as a means of faster and more efficient money transfers particularly internationally. There is also the threat hanging over central banks, that unless they get their act together and enter the fray, digital currencies backed by big tech, could end up being dominant in the future, especially as more societies drift towards being cashless.

“Unlike cryptocurrencies, a Bank of England backed CBDC would, by its very nature, be centralised. This new breed of digital sterling would sit alongside cash and current electronic payments, and could improve the efficiency and cost of retail sales and large value transactions…The fear is that it will be the first step on the slippery slope to a fully cashless society. Although the UK government is keen to stress that coins and notes are here to stay, as the number of digital transactions increases and the withdrawal of money from cashpoints falls, other countries are already inching closer to culling cash altogether”, she…