Tuesday, May 11, 2021

The Bank of England and HM Treasury announce plans to create a CBDC.

The Takeaway:

The Bank of England and HM Treasury recently announced plans to create a Central Bank Digital Currency (CBDC). England joins several other countries in the CBDC race.

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The Bank of England and HM Treasury recently announced plans to create a Central Bank Digital Currency (CBDC). This is potentially the first step for a digital currency issued by the Bank of England that would exist alongside cash and other payment methods, rather than replacing them outright. Central banks worldwide are growing concerned at the pace of innovation among blockchain technology and the rate at which financial institutions are adopting cryptocurrencies.

 

The UK is the latest to join the global race to develop CBDCs.

Nicknamed “Britcoin,” the UK is the latest to join the global race to develop CBDCs. From Tesla to Visa, several major institutions are exploring ways to enable institutional investments and consumer payments using cryptocurrencies. News of Britcoin came just days after Coinbase—the largest cryptocurrency exchange in the US—went public. Chancellor of the Exchequer, Rishi Sunak, announced that Britain “need[ed] to go further” to stay at the forefront of financial innovation. 

 

CBDCs are still in development around the world.

CBDCs are still in development around the world. As such, they have no standard definition or proven use cases. Britcoin is in its very early stages. A task force is exploring the potential a CBDC could hold for the UK government and economy, but no decisions have been made yet to develop one. Central banks are developing CBDCs to retain control over monetary policy, especially as cryptocurrencies are increasingly used for payments and transactions: a financial realm where central banks have no jurisdiction or leverage. China has been leading the CBDC race with the People’s Bank of China successfully piloting digital yuan in several cities. 

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Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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