Don't Call It 'Britcoin': Digital Pound Nothing Like Crypto, Bank of England Official Says

The central bank has made no decision on whether a digital pound would use distributed ledger technology, Deputy Governor Jon Cunliffe said.

AccessTimeIconFeb 7, 2023 at 4:44 p.m. UTC
Updated Feb 7, 2023 at 7:33 p.m. UTC

The Bank of England is not okay with the press calling a digital pound issued by the central bank the "Britcoin."

"The digital pound can be confused in peoples' minds with crypto assets such as bitcoin. I should take this opportunity to correct this misapprehension. Indeed, nothing could be further from the truth," Bank of England Deputy Governor Jon Cunliffe said during a Tuesday speech on the central bank's new plans for a digital pound.

A majority of cryptocurrencies are "highly speculative" and have "no intrinsic value," Cunliffe said, adding that although it is possible some technologies underlying crypto could help develop a digital version of the pound, the bank is considering a range of options. While the central bank has made no decision on using distributed ledger technology (DLT) which is currently used for cryptos, Cunliffe said experimentation with decentralized record-keeping is "important to ensure it is appropriately considered."

The Bank of England, along with the U.K.'s finance ministry, opened a consultation on Tuesday, inviting public opinions on plans for a central bank digital currency. While U.K. banks responded to the news with concerns about bank runs, the consultation document laid out plans to cap individual holdings of the digital currency at between 10,000 (US $11,900) and 20,000 British pounds.

Cunliffe reiterated the need for caps for "keeping outflows from the banking system broadly within the assumptions set out in the Bank’s earlier modeling work" during his Tuesday speech. In response to a question, he said U.K. citizens should be able to receive their salary and pension in digital pounds to make sure it's useful.

The bank also envisions fiat-backed private crypto like stablecoins – which the U.K. is planning to regulate under its upcoming Financial Services and Markets Bill – operating alongside the digital pound for payments.

"The proposals set out today are designed to ensure that the U.K. is well placed to take advantage of the benefits that these changes can offer, while ensuring that we preserve the safety and uniformity of money in the U.K.," Cunliffe said.

Camomile Shumba contributed reporting.


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Sandali Handagama

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