‘Britcoin’ Consultation Lays Groundwork for UK’s Digital Pound

Britain is moving ahead with plans for a digital pound that could be in use by the late 2020s, the country’s Treasury and the central bank said yesterday.

“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,” the UK’s chief financial minister Jeremy Hunt said in a statement.

Following the announcement, a new consultation has today been launched by the Bank of England regarding the design of a central bank digital currency (CBDC). Andrew Bailey, Governor of the Bank of England, said issues such as privacy would need to be considered before a digital pound is launched.

“As the world around us and the way we pay for things becomes more digitalized, the case for a digital pound in the future continues to grow,” Bailey said. “A digital pound would provide a new way to pay, help businesses, maintain trust in money, and better protect financial stability.”

While details of the project have yet to be decided, the announcement set out principles that will form the basis of any digital pound.

Under current plans, neither the Government nor the Bank of England would have access to personal data. The private sector would handle access to the currency through digital wallets, and there would be initial restrictions on how much an individual or business could hold.

The full consultation paper will be published on the Bank of England website at an unspecified time on Tuesday, a spokesperson confirmed. A technical paper will also be published at the same time.

It will then open for comments until June 7.

The road to ‘Britcoin’

Prime Minister Rishi Sunak first asked the central bank to explore the possibility of a digital pound when he was Chancellor in 2021, dubbing the project “Britcoin.”

Sunak, who took the top job in October last year, has gained something of a crypto-friendly reputation, having also asked the Royal Mint to produce an “NFT for Great Britain” last year as part of a wider package of plans to become a crypto hub.

That project is still ongoing, though an initial timetable had the issuance penciled in for last summer. The Bank of England and the Treasury have been working together on a digital pound since at least April 2021, when the two formed a joint task force.