Rishi Sunak plans to replace our money with official digital currency

The Britcoin Revolution! Rishi Sunak plans to replace our money with official digital currencies in ‘the biggest upheaval in the monetary system in centuries’

  • Bank of England would introduce a direct digital equivalent of physical money
  • Proponents say the move will boost the economy during a financial crisis
  • Can save cost and time to make online payments and transfer money

Cash in people’s pockets would be replaced by a new ‘Britcoin’ digital currency in a plan pushed by Chancellor Rishi Sunak.

In what Treasury insiders say would be the biggest upheaval in the monetary system in centuries, the Bank of England would create a direct digital equivalent of physical money and take it in the same way as the pound.

Its supporters in the Treasury say it would enable the Bank to boost the economy in times of financial crisis by depositing the ‘Britcoins’ directly into people’s bank accounts.

Britcoin can also dramatically reduce banking fees for small businesses. However, critics warn that a digital version of the pound could lead to greater financial instability

A task force of Treasury and Bank officials set up to examine the merits of Britcoin - known as the central bank's digital currency - is expected to report to Mr. Sunak by the end of the year.

A task force of Treasury and Bank officials set up to examine the merits of Britcoin – known as the central bank’s digital currency – is expected to report to Mr. Sunak by the end of the year.

It can also reduce the costs and time required to make online payments and transfer money through the banking system.

Britcoin can also dramatically reduce banking fees for small businesses. Critics warn, however, that a digital version of the pound could lead to greater financial instability, making it more difficult for the Bank to regulate the economy through monetary policy, such as setting interest rates.

It is also feared that the introduction of Britcoin would lead to higher loan and mortgage interest rates as millions of people have transferred cash to central bank digital currencies, eating up the amount of money that large street banks have on deposit to lend to borrowers .

A task force of Treasury and Bank officials set up to examine the merits of Britcoin – known as the central bank’s digital currency – is expected to report to Mr. Sunak by the end of the year.

The Treasury is believed to be more interested than the Bank of England in the idea of ​​creating an official UK digital currency to compete with the rise of Bitcoin as they are wary of the sheer numbers of people piling up. in cryptocurrencies. Some investors have lost huge amounts of money because the price of Bitcoin has been spinning wildly.

Meanwhile, other countries are racing to develop their own digital currencies. China has tested a digital yuan; US Treasury Secretary Janet Yellen has hinted that a digital dollar could be created; and the European Central Bank is examining plans for a digital euro. Unlike Bitcoin and other cryptocurrencies, Britcoin is said to be pegged to the value of the pound and backed by the central bank. That should, in theory, prevent it from fluctuating wildly in value.

According to plans being considered by officials, consumers may be able to keep the currency in accounts linked directly to the Bank of England. Officials are undecided on whether or not to tie interest rates to Britcoin, which could make it attractive to savers as an alternative to cash.

Retailers and other businesses could accept the digital currency for regular payments that customers would otherwise have made with a debit or credit card.

But the amount of money each individual could hold in Britcoin will likely be limited initially. Crucially, consumers can easily convert Sterling to Britcoin. It would also be made very easy – and very fast – to transfer Britcoin back to regular money that can be withdrawn from an ATM. That could help avoid the kind of long queues that occurred when thousands tried to get their money out of Northern Rock in 2007.

The Bank of England would set up a direct digital equivalent of physical money and take it in the same way as sterling sterling

The Bank of England would set up a direct digital equivalent of physical money and take it in the same way as sterling sterling

A digital currency where customers have accounts linked directly to the Bank of England would also make it much easier to spend so-called ‘helicopter money’, where money is put into people’s pockets by the government.

This could be a more effective way to stimulate the economy than quantitative easing (QE) in times of crisis.

QE has been used to flood the banking system with new money since the 2009 financial crisis, but the scheme has been criticized for trapping potential inflation while failing to seep the money to households and businesses in the rest of the economy. .

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