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Why Britain needs a digital pound?


The UK wanted to issue its own digital currency. The UK Treasury and the Bank of England created their own working group to study the issue. If issued, it will not replace cash, but only supplement it, CNBC reports. This means that bank accounts and cash savings will not lose their value.

In addition, some of the privileges of using the first English digital money were announced. In particular, the potential for direct maintenance of bank accounts bypassing intermediary payments. As for the prospects for the implementation of this project, we know that the Minister of Finance has already given a corresponding order on the creation of Britcoin. However, the final decision on the introduction of the digital pound will be made only after a full assessment of all possible risks.

The British kingdom is not the first state to consider the introduction of CBDC

At the moment, several countries engaged in the development of digital currencies, including Sweden, France, Russia and others. A new impetus to development was given by the growth of Bitcoin and the trend towards abandoning the use of cash in general. Now China is implementing it most actively. The authorities have already launched an experimental circulation.

CityUnited analytical center chairman Daniel Hodson said China’s progress in launching the CBDC should concern British financial authorities. “The central bank digital currency (CBDC) must become the fundamental foundation for the country’s post-Brexit competitiveness, or China will jump ahead”.

Note that the Bank of England is already discussing CBDC. This should be a priority, since this technology is the future. Moreover, it can make London more attractive for global traders.

In April, the Russian Central Bank also presented a plan for the introduction of a digital currency. They are going to test the prototype next year. However, Russians are not yet enthusiastic about the initiative.

Possibilities of the digital pound, its pros and cons

UK Central Bank Governor Andrew Bailey considers Bitcoin to be a very popular but volatile cryptocurrency. So, it cannot act as a stable asset.

According to him, investing real funds in Bitcoin is very risky. But the new Britcoin will be based on real values, and therefore will become a safer digital currency.

UK Treasury Secretary Rishi Sunak said that thanks to the digital British pound, financial services in the country can become more transparent, accessible and efficient.

However, it should be borne in mind that some organizations, for which anonymity in their activities is important, will not want to use the digital pound due to its transparency for financial regulators.

Laws should ensure the anonymity and security of users of British digital currency.

In addition, to break the ice of distrust of the digital pound among government organizations and companies, it is important to provide training on the use of CBDC.

Cryptocurrency experts note the importance of launching a digital pound. If Britain doesn’t move rapidly in launching a national digital currency, this could lead to a weakening of the pound in the global financial market.

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