The UK isn’t going to sit idly by while other countries launch digital currencies. Today, the Bank of England and HM Treasurythat they will jointly explore “a new form” of virtual money for the public and private sector. A dedicated taskforce has been appointed to assess the risks and practicalities of introducing a digital currency. To help glean new use cases, officials will consult with stakeholders including banks, fintechs, payment infrastructure providers, and technology companies. For now, the UK is simply doing its research and has made no commitment to feasibly act.
Despite emphasizing that the digital currency would complement banknotes and deposits instead of replacing them, the massive undertaking still poses huge implications for the financial system. On the one hand,virtual money could increase the speed of domestic and cross-border transactions, lower costs and even help connect more people to the economy. But, it could also undermine the status of traditional banks, including central banks that help maintain financial stability.
The new taskforce will also monitor international digital currency developments. According to the, about 86 percent of the world’s central banks are scrutinizing the pros and cons of virtual cash. , but others including and have launched their own experiments with digital currency. Britain, a former EU member, will also likely be paying close attention to the bloc’s preparatory work on a .
The impetus is largely a reaction to the progress made by the private sector. In 2019, Facebook announced its own, currently branded as . A number of companies are also embracing cryptocurrencies including payment providers such as and and EV maker .
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.