The U.K.’s chancellor is pushing to launch a central bank digital currency known as “Britcoin,” according to a report.
According to The Mail on Sunday, Rishi Sunak’s plans “would be the biggest upheaval in the monetary system for decades” — creating a digital equivalent to banknotes and coins.
The Treasury, which is responsible for overseeing the country’s financial matters, believes a CBDC could give the economy a much-needed boost in the wake of the pandemic, not least because it would allow Britcoins to be deposited directly into people’s bank accounts.
However, some fear that there could be downsides associated with this new digital asset, and that it could cause interest rates on loans and mortgages to surge.
The newspaper’s report cautions that talks are at a very early stage, and a taskforce is only expected to report back to Sunak at the end of the year. Also, it’s expected that the amount of Britcoin a consumer could own would be limited at first.
Some corners of the British press have been deeply skeptical of the plans to embrace a CBDC.
Ross Clark, a columnist, wrote in right-leaning The Spectator magazine that he fears “Britcoin is part of a scheme designed to persuade us to part with cash so that negative interest rates could be imposed in future — eliminating the need for the government ever to balance its books.”
Sunak has attracted praise from some for his handling of the U.K.’s finances since the start of the coronavirus pandemic.
He quickly introduced a furlough scheme that meant people who were unable to work because of lockdown measures would have 80% of their salaries paid for by the government.
At 40 years old — making him younger than other senior politicians — supporters have claimed he cuts a more competent and modern image than Prime Minister Boris Johnson.