Why ‘Britcoin’ could disrupt banks more than a digital euro
With the digital pound, the UK is following much of what the European Central Bank has done on the digital euro. But could the UK’s more unified banking sector foster a more revolutionary central bank digital currency?
In moving the digital pound from research to what think-tank the Atlantic Council classes as development stage, the UK is ahead of the US, but behind the eurozone. Indeed, while the US is still deliberating over whether to move ahead with preparations for a digital dollar for retail use, the EU is already preparing legislation for a digital euro pilot as early as this year.
By contrast, the digital pound won’t start pilots until 2025 at the earliest, a consultation paper released by the Treasury and Bank of England in early February said.
Clearly, Chancellor of the Exchequer Jeremy Hunt and Bank of England governor Andrew Bailey have had more urgent things to deal with recently, such as the near collapse of the country’s pension system. Nevertheless, “Britcoin” (as parts of the press have dubbed it) eventually could be a more revolutionary development than the digital euro.
In some ways, the UK’s proposals are almost identical to those of the European Central Bank.
The consultation paper said the digital pound would be “at least as private as current forms of digital money”, which is nearly the exact wording the ECB has used.