LONDON (AP) 鈥� Britcoin is moving closer to reality.
U.K. authorities on Monday said British businesses and consumers are likely to need a digital version of the pound, formally asking for public comment on the idea of introducing a central bank digital currency.
Britain, home to the world鈥檚 second-biggest financial center, is , the Bahamas and Jamaica in rolling out a digital currency. More than 80% of the world鈥檚 central banks are considering launching digital currencies or have already done so, according to the consultant PwC.
鈥淲hile cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that鈥檚 trusted, accessible and easy to use,鈥� Treasury chief Jeremy Hunt said in a statement. 鈥淭hat鈥檚 why we want to investigate what is possible first, whilst always making sure we protect financial stability.鈥�
The call for public input comes almost two years after the Treasury and Bank of England said they were considering introducing a digital currency.
While Prime Minister Rishi Sunak suggested naming the initiative 鈥淏ritcoin鈥� when he was Treasury chief, the Bank of England has stressed that the potential currency shouldn鈥檛 be confused with cryptocurrencies like Bitcoin.
Backed by the central bank, the new currency would be 鈥渞eliable and retain its value over time,鈥� in contrast to and threaten the holdings of investors, the Bank of England says on its website.
That industry has been particularly unstable in recent months, . tanked assets, while crypto exchange and bankruptcy in November against founder Sam Bankman-Fried.
The proposed digital currency would be denominated in pounds, with 10 pounds of digital currency always equal to a 10-pound note, the bank said. Held in a digital wallet, the currency could be used to pay for goods and services electronically.
Supporters of central bank digital currencies say they make digital transactions easier and cheaper and expand access to the financial system because they can be used by people who don鈥檛 have bank accounts.
This is one of the reasons the Bahamas became the first country to introduce a digital currency in 2020. Nigeria and , with China and more than 20 other countries running trial projects. The U.S. and European Union are considering introducing digital currencies.
But digital currencies also present risks, including cyberattacks, privacy concerns and the danger that they can be used by criminals.
Because money invested in central bank digital currencies is safer than a bank deposit, they also may draw savings away from commercial banks and weaken the financial system, critics argue.
A digital pound would have 鈥渞isks but no obvious benefits,鈥� former Bank of England Gov. Mervyn King, now a member of the House of Lords, said recently.
While such digital currencies may be useful in countries that don鈥檛 have effective banking systems, that鈥檚 not the case in the Britain, he said.
鈥淭he government has said that it wants the U.K. to be at the forefront of innovation, crypto-assets and fintech, but we need to be selective and not driven by a misplaced enthusiasm for all things crypto,鈥� King said.
Danica Kirka, The Associated Press
