- Finance Minister Rishi Sunak plans to revolutionize the future of finance by introducing the “Britcoin” digital currency.
- Unlike Bitcoin, Britcoin is managed by the Central Bank of the United Kingdom.
- Experts feel that Britcoin could boost the economy during the financial crisis.
Digital currencies offered and traded in digital or electronic form are a new reality and are ready to impact the future of the financial system. Bitcoin and other digital currencies such as Dogecoin, Litecoin, Ethereum and Ripple are being investigated around the world and many new currencies are under development. During April HM Treasury and the Bank of England have created a joint task force to consider whether the central bank digital currency, the digital currency, should be launched in the UK. By the central bank.
According to a recent report, Prime Minister Rishi Sunak is in close discussion with Sir Iain Duncan Smith’s Task Force on Innovation, Growth and Regulatory Reform (TIGRR) proposals and the Central Bank’s digital currency. Snacks reportedly say that the CBDC is expected to be an additional currency rather than an alternative currency for cash and bank deposits. The Bank of England (BoE) issues CBCDs and exists in parallel with cash and bank deposits.Further strengthen the UK financial system by offering new digital alternatives to physical money. By the end of 2021, the Task Force will submit the findings of the report to the Prime Minister.
After Bitcoin recently reached a peak price of over £ 46,000 per coin in April 2021, the BoE-Financial Task Force was established to consider introducing a digital version of Sterling into the UK economy. Like Bitcoin, Britcoin is planned as the only difference digital currency that is said to be directly linked to the pound sterling and the Bank of England. This means that, like other cryptocurrencies, the value of Britcoin does not move back and forth due to fluctuations in supply and demand.
The Britcoin service was first launched by software company Intersango in July 2011. Intersango has been renamed to Britcoin Exchange Intersango. Like other active digital currencies, traders were allowed to perform Britcoin transactions securely and privately without a bank account. The currency also provided investors with an alternative to the British pound. In 2019, Britcoin was delisted from most exchanges.
Currently, HM Treasury officials have responded differently to Britcoin’s proposal due to pros and cons that have a direct impact on the UK economy. According to some experts, Britcoin does not rely on quantitative easing policies, but instead sends money directly to the customer’s account, that is, paying “helicopter” money to people’s accounts, the current financial crisis. May boost the economy during. Increasing the money supply can provide the impetus needed for economic decline, And Britcoin supporters claim that banking costs for small businesses will be reduced and transaction time for online payments will be minimized.
Also, unlike Bitcoin, the CBDC unit has a payment function that can be used as a payment method. Like banknotes, the CBDC has a serial number to avoid imitation and duplication.
It has its advantages, but critics argue that: Britcoin has the potential to strengthen financial instability rather than mitigate it. For banks using parallel digital currencies in their financial systems, determining interest rates and other regulatory measures can be very difficult. Moreover, As more people switch to Britcoin, the amount available at High Street Bank will soon decrease. This reduced lending amount, in turn, leads to higher lending and mortgage rates.
Britcoin is expected to address the concerns that arise from other cryptocurrencies such as Bitcoin. It is also expected to lower the price of Bitcoin. But is that really the opposite?
According to Nigel Green, an independent financial adviser and CEO of asset management company deVere Group, the move to launch Britcoin to defeat Bitcoin turned out to be counterproductive, and by valuing its price, Bitcoin We will support the adoption of.
Three reasons Green quoted in support of his claim that the new UK CBDC initiative could backfire. First, the adoption of cryptocurrencies such as Bitcoin gains more legitimacy when the central bank itself verifies the use of digital currencies. This will reduce the level of skepticism in people’s minds about lack of physical cash. This will allow people to buy Bitcoin and see the intrinsic value of being borderless, digital, fast, global and more cost effective than traditional money.
Second, Britcoin has many regulatory advantages over Bitcoin, but it is controlled and its supply is controlled by the BoE. This means that unlike Bitcoin, its supply and value can be adjusted and manipulated by the central bank. Due to limited supply, Bitcoin is not regulated by individual authorities and its value cannot be manipulated.
Finally, traditional banking systems are becoming more distrustful among the younger “digital native” generations. Therefore, digital cache systems are favored by a new generation of tech savvy. Bitcoin is not controlled by anyone, it is based on fully transparent and open peer-to-peer technology, as Britcoin is managed in secret by some banking professionals, and all decisions are community-based. is.
Apart from the UK, other countries are also considering launching a digital version of their currency. According to the World Economic Forum, about 86% of the world’s central banks survey the central bank’s digital currencies and weigh the pros and cons.
China wants to launch CBDC and become the first major central bank to do so. Within the next five years, the European Central Bank also plans to launch a digital version of the euro. The Federal Reserve Board isn’t going to launch the digital dollar in a hurry, but it’s ready to roll the ball.
Which one is UK’s future currency? Source link Which one is UK’s future currency?