Mark Weaden
The Bank of England joins a growing list of other nations in planning to create its own cryptocurrency
The announcement comes at a time when the cryptocurrency markets are going through the most exciting period in recent memory, as Bitcoin soars to a new all-time high of above $68,000.
The potential for 'britcoin' from the Bank of England would be a controversial move. But, with a long time scale, it may still never happen. Digital asset classes are grabbing the attention of governments and investors the world over, so it’s no surprise to see the United Kingdom follow in the steps of nations like China, who recently pushed through the native coin the digital yuan.
The Bank of England’s Plans
Just last week the Bank of England warned that inflation was due to peak at 5% in early 2022. Then just yesterday the Bank announced plans to introduce a central bank digital currency (CBDC) next year. With a huge influx of investment, both public and private, into cryptocurrencies, it’s important for the Bank of England to act quickly, otherwise, it may be too late to draw the public away from mainstream cryptocurrencies like Bitcoin and Ethereum.
Given that Bitcoin is the best performing asset year to date, crypto has great appeal to investors. Officials from the Bank of England stated that ‘The earliest date for the launch of a UK CBDC would be in the second half of the decade,’ they said. It is a ‘major national infrastructure project.’ The aim is to provide a digital currency to work alongside the existing cash and bank deposits, opposed to replacing them outright.
The coin dubbed ‘Britcoin’ is an exciting prospect, but the word is that the coin won’t be available until at least 2025 for the currency to be launched in the UK. The Bank’s deputy governor for financial stability said ‘The plan to publish a consultation next year on CBDC is a crucial step in our policy development, especially as we further our thinking on the pressing issues at hand. ‘What it will do is provide a platform for interested parties and relevant groups to engage with the key questions on the merits of CBDC, and whether the public sector should advance to a development phase.’
