Voice of America
07 Feb 2023, 16:07 GMT+10
london - U.K. authorities said Monday British businesses and consumers are likely to need a digital version of the pound, formally asking for public comment on the idea of introducing a central bank digital currency.
Britain, home to the world's second-biggest financial center, is trailing former colonies such as Nigeria, the Bahamas and Jamaica in rolling out a digital currency. More than 80% of the world's central banks are considering launching digital currencies or have already done so, according to the consultant PwC.
"While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that's trusted, accessible and easy to use," Treasury chief Jeremy Hunt said in a statement. "That's why we want to investigate what is possible first, whilst always making sure we protect financial stability."
The call for public input comes almost two years after the Treasury and Bank of England said they were considering introducing a digital currency.
While Prime Minister Rishi Sunak suggested naming the initiative "Britcoin" when he was Treasury chief, the Bank of England has stressed that the potential currency shouldn't be confused with cryptocurrencies like Bitcoin.
Backed by the central bank, the new currency would be "reliable and retain its value over time," in contrast to cryptocurrencies that can fluctuate wildly and threaten the holdings of investors, the Bank of England says on its website.
That industry has been particularly unstable in recent months, escalating calls for greater regulation. Crypto crashes last year tanked assets, while crypto exchange FTX's multibillion-dollar collapse and bankruptcy in November triggered fraud charges against founder Sam Bankman-Fried.
The proposed digital currency would be denominated in pounds, with 10 pounds of digital currency always equal to a 10-pound note, the bank said. Held in a digital wallet, the currency could be used to pay for goods and services electronically.
Supporters of central bank digital currencies say they make digital transactions easier and cheaper and expand access to the financial system because they can be used by people who don't have bank accounts.
This is one of the reasons the Bahamas became the first country to introduce a digital currency in 2020. Nigeria and Jamaica have since followed suit, with China and more than 20 other countries running trial projects. The U.S. and European Union are considering introducing digital currencies.
But digital currencies also present risks, including cyberattacks, privacy concerns and the danger that they can be used by criminals.
Because money invested in central bank digital currencies is safer than a bank deposit, they also may draw savings away from commercial banks and weaken the financial system, critics argue.
A digital pound would have "risks but no obvious benefits," former Bank of England Gov. Mervyn King, now a member of the House of Lords, said recently.
While such digital currencies may be useful in countries that don't have effective banking systems, that's not the case in Britain, he said.
"The government has said that it wants the U.K. to be at the forefront of innovation, crypto-assets and fintech, but we need to be selective and not driven by a misplaced enthusiasm for all things crypto," King said.
Get a daily dose of Orlando Echo news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Orlando Echo.
More InformationMOSCOW, Russia: A new campaign has begun across Russia to attract badly needed recruits to replenish its troop numbers for ...
WASHINGTON D.C.: US House of Representatives Speaker Kevin McCarthy has said that lawmakers will move forward on legislation aimed at ...
CROWNPOINT, New Mexico: Navajo Technical University, located on the largest Native American reservation in the US, has become the first ...
WEST READING, Pennsylvania: An explosion occurred at a chocolate factory in Pennsylvania, killing seven people and seeing ten staff members ...
OTTAWA, Canada: US President Joe Biden and Canadian Prime Minister Justin Trudeau have announced a plan to close a loophole ...
UVLADE, Texas: Texas police stopped a Florida-bound freight train this week and discovered two migrants had died in a freight ...
UVLADE, Texas: Texas police stopped a Florida-bound freight train this week and discovered two migrants had died in a freight ...
ROLLING FORK, Mississippi: A powerful tornado has struck Mississippi, killing at least 25 people, injuring dozens, flattening entire blocks and ...
BENTON, Arkansas: Reuters reported that due to a reduction or elimination in evening and weekend shifts, Walmart will lay off ...
Miami [US], March 30 (ANI): Sorana Cirstea advanced to her first semifinal of a WTA 1000 event in a decade ...
Having already locked up their best record in a decade and closing in on clinching a playoff berth, the New ...
Brandon Montour scored his 14th goal of the season at 1:41 of overtime and the visiting Florida Panthers came back ...