At a recent media event, Ben Broadbent – deputy governor for monetary policy at the Bank of England (BoE) – spoke about the Bank’s exploration of a Central Bank Digital Currency (CBDC). He made it clear that the BoE is taking a careful approach to the potential roll-out of such a currency.
Broadbent suggested that the introduction of a British CBDC would benefit the wider financial system by providing efficient, convenient payments. He even cited numerous advantages this new technology could offer. Apart from that, the central banker disclosed that the institution is investigating the regulations of payment technologies like CBDCs.
Bank of England and British Treasury get into Action
The Bank of England and British Treasury published a consultation document in early February to explore the potential for a central bank digital currency (CBDC) to run alongside the Pound sterling.
Jeremy Hunt, chancellor of the exchequer, and Andrew Bailey, governor of the Bank of England, have stated that the implementation of a digital Pound could still be ruled against; however, the consultation paper suggests that a CBDC may eventually be necessary.
Hunt remarked that both organizations are aiming to craft a modernized digital payment system that keeps the cash still in use. The ultimate goal is to introduce a government-backed equivalent to privately issued stablecoins.
Yesterday we published our Consultation Paper on the digital pound. But we are still committed to the future of cash, and we will play our part in ensuring that anyone who wants or needs to use cash in the future is able to do so. Find out more here: https://t.co/pNryjpDH4J pic.twitter.com/yZda89EvI4
— Bank of England (@bankofengland) February 8, 2023
The Britcoin Controversy
The central bank of the country has commented concerning “Britcoin” – a term widely used by the British and international media – shortly after the release of the consultation paper in February. They have indicated that they would not want to refer to the proposed central bank digital currency (CBDC) by that name.
UK Prime Minister Rishi Sunak had set a challenge to the central bank back in 2021 when he was the finance minister, to look into CBDCs. Subsequently, in October 2022, Andrew Griffith, the financial services minister for Britain, stated that now it’s not possible to ignore the development of CBDCs with global central banks currently advancing their research towards this sector.