Officials at the two institutions said a central bank digital currency, or CBDC, which has been unofficially dubbed “Britcoin”, could present significant opportunities for UK consumers and businesses after it’s rolled out as early as the second half of this decade.
In a consultation paper due to be published on Tuesday, the BOE and the Treasury will call for opinions and evidence on whether they should build what has officially been termed a digital pound. They haven’t made a decision on whether to move forward with the project, but the work is building the case for action.
Though a CBDC would be based on blockchain technology used by speculative cryptocurrencies such as bitcoin, it would be issued by the Bank of England and would be backed by sterling, becoming interchangeable with cash and bank deposits. A CBDC would be designed as an alternative to these private sector stablecoins, which investors can hold in the confidence that they are backed by the BOE.
Neither the Treasury nor the Bank has yet produced a forecast of what it might cost to build Britcoin, but it is likely to be a substantial sum.