Bank of England Says ‘Britcoin’ Will Boost UK Businesses

The U.K.’s digital currency project will have real world benefits for the country’s businesses.

That’s according to Ben Broadbent, deputy governor for monetary policy at the Bank of England, who said at a conference Monday (Feb. 27) that the country’s central bank’s “keenest attention” was aimed on the regulatory impacts of new payments technology such as a central bank digital currency (CBDC).

“The experience of digitalization so far is that new products and services enabled by new technologies can be adopted very rapidly at scale,” said Broadbent, whose comments were reported by Bloomberg News.

“This obviously brings opportunities for financial institutions, for businesses, for individuals. We would expect to see continued improvements, reductions in friction and cost of payment.”

Broadbent’s comments come three weeks after the Bank of England (BoE) and British Treasury announced they were exploring the feasibility of a CBDC, which they’ve dubbed “Britcoin.”

Earlier this month, the two entities launched a formal consultation to create guardrails around the launch of a CDBC that could one day sit alongside paper currency in England. The CBDC — also known as the “digital sterling” or “digital pound” — would be issued by the BoE and backed by the government.

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified,” the consultation paper says.

The Bank of England has said it hopes to have a CBDC launched by the end of the decade, but notes a potential Britcoin would not be built until at least 2025.

“As digital payments become more common, and the use of cash declines, governments around the world are exploring CBDCs as one potential way to keep national governments involved in the circulation and supply of money,” PYMNTS wrote earlier this month.

Around 114 nations, representing 95% of global gross domestic product, are investigating what a CBDC might look like for their countries. And about 60 countries are already in an advanced phase of this exploration, with a national CBDC either under development, being piloted, or already launched.

However, these projects are not without their critics, and England is no exception.

“We have yet to hear a convincing case for why the UK needs a retail CBDC,” says a report by the House of Lords Economic Affairs Committee, which goes on to stress that it sees the digital pound as “a solution in search of a problem.”