The Bank of England is discussing with the Treasury, the possibility of launching a digital currency for the Central Bank of England.
Evaluating the design of a new type of digital currency and its possible benefits would be a step forward in the possibility of launching a British digital currency.
Households and businesses will use the new currency in addition to cash and bank deposits, without replacing it.
No decision has been made on the use of such a currency in Britain yet.
But the consultations, which will take place in 2022, will form part of the “research and exploration” phase, and will help the bank and the government develop plans over the next few years.
Central banks around the world are developing or exploring digital currencies, after the emergence and spread of cryptocurrencies such as Bitcoin.
China is one of the countries seeking to have a strong digital currency parallel to the yuan
On Tuesday, the governor of the People’s Bank of China announced next steps that include improving protection of currency privacy and its interaction with other payment instruments.
Britain plans to move towards digital currency
The British digital currency (CBDC) is not yet as advanced as the Chinese effort. The earliest date for the launch of this currency is in the second half of the decade.
The consultation paper will present an assessment by the Treasury and the State Bank of the state of central bank currencies, before deciding whether or not to proceed.
A statement issued by the British Central Bank said that “technical specifications will follow the consultations that will explain the proposed engineering concept for CBDC.
Finance Minister John Glenn said individuals and businesses would use the central bank’s digital currency to meet their daily payments needs and help Britain stay at the forefront of innovation and technology in the financial sector.
In July, the European Bank took a big step towards launching a digital currency with great value and they are seeking to own this currency for the European citizen And the pace of work on the digital euro accelerated, after Facebook unveiled plans in 2019 to create its own currency. And “Facebook” later reconsidered the project of its currency, “Libra”, after strong opposition from the projects, and changed its name to “Diam”.
While China was ahead of the CBDC’s moves, the US Federal Reserve was more skeptical.
Central banks have warned users of digital currencies of the existing inflation situation due to the large number of users of digital currencies Nigeria was the first African country to launch a trial of the CBDC currency last month.
In September, El Salvador became the first country to use the virtual currency Bitcoin as a legal currency, along with the US dollar.
But it led to large protests in the country after what experts predicted would lead to inflation and financial instability in the country.
At the end of the article, the world is heading towards digital transformation and financial freedom in the coming years, which makes the search and mining of digital currencies very important in the next stage, and there are many countries seeking to own their own digital currency