After the publication of a consultation document that explains the planned digital pound, which the general public has dubbed “Britcoin,” the United Kingdom is one step closer to creating a central bank digital currency (CBDC).
The Bank of England (BoE) and the United Kingdom Treasury both contributed to the publication of the 116-page consultation document on February 7th. In addition to that, a technology working paper that delves into the technical as well as economic design issues was published.
CBDCs such as the digital pound may co-exist in what the authors of the article believe to be a “mixed payments economy,” despite the increase of privately-issued stablecoins over the last few years, according to the findings of the paper.
“The digital pound does not need to be the predominate form of money in order to accomplish its public policy aims in the same way that cash coexists alongside private money. It is possible that the digital pound will coexist with other types of currency, such as stablecoins.
Although the Bank of England (BoE) and the Treasury Department (Treasury) have expressed optimism that a digital version of the pound would be introduced by 2025 “at the earliest,” they are not yet one hundred percent positive that this will really occur.
According to the report, “The Bank and HM Treasury assess it is likely to be necessary in the UK to have a digital pound,” however there is currently no decision that can be made to adopt such a currency.
According to the paper, the primary objective behind the launch of the digital pound is to “promote innovation, choice, and efficiency in domestic payments” and to ensure that the money issued by the central bank of the United Kingdom continues to serve as “an anchor for confidence and safety” in the monetary system of the country.
“For the digital pound to play the role that cash plays in anchoring the monetary system, it needs to be usable and sufficient adopted by households and businesses,” this quote from the Financial Times reads. “For the digital pound to play the role that cash plays in anchoring the monetary system, it needs to be usable and sufficient adopted by households and businesses.”
Users will have access to e-GBP after they have established a connection to an API that is managed by the private sector and that, in turn, links to the core ledger.
Additional programmability capabilities, including as smart contracts and atomic swaps, which make it possible for assets to be moved across networks, will be made available.