“We are not replacing cash with” Britcoin “

Chancellor of the Exchequer Rishi Sunak delivers his speech at the “Mansion House” in London on July 1st. Photo: Stefan Rousseau / Reuters

British Chancellor Rishi Sunak has put to bed speculation that the government may consider replacing cash with a digital currency that has been dubbed ‘Britcoin’.

The Chancellor wrote in a lengthy LinkedIn post on Monday afternoon that he wanted to outline the government’s plans to stay on the cutting edge of technology while protecting access to cash.

He wrote: “It is right that we explore the potential role of central bank digital currencies (CBDCs) to understand the many opportunities and challenges they could bring.

“A CBDC would potentially be a new form of digital currency issued by the Bank of England for use by households and businesses. It would exist alongside cash and bank deposits.”

Noting the joint working group that the Treasury has launched with the Bank of England on CBDCs, he said there were a number of important considerations to consider first and that any digital currency launched would complement cash and cash. bank deposits, rather than replacing them.

Read more: “Britcoin”: central bank digital currencies explained

CBDCs represent a new frontier for central bank stimulus, potentially acting as a channel for policies such as stimulus checks, emergency loans, and UBI (Universal Basic Income). Central banks could induce more powerful and directed “drops of money” to stimulate the economy rather than changing interest rates.

Retail CBDC projects appear to be more advanced in emerging economies, according to PwC.

In April, the BoE said the task force would explore the viability of a “digital book,” which at the time was dubbed “Britcoin” by the press.

In April, the bank announced that it would launch a working group in conjunction with the Treasury, exploring the viability of a “digital book”, dubbed “Britcoin” by the press.

He said any CBDC would be a new form of digital currency that could be used by both households and businesses. It would coexist with cash and bank deposits, rather than replacing them.

As Sunak noted, the government and the BoE have yet to make a decision on whether to introduce a CBDC in the UK and will engage widely with stakeholders to discuss the benefits, risks and practicalities of doing so, the BoE said.

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