The Bank of England is reconsidering its plans regarding the issuance of 'Britcoin', the proposed digital version of the pound sterling, amid increasing questions about the viability of central bank digital currency in light of the rapid advancements of the private sector in electronic payment solutions.
According to a report by Bloomberg, central bank officials encouraged financial institutions to focus their efforts on developing efficient technological payment systems that could eliminate the need to issue a retail digital currency.
However, the door has not been completely closed, as the bank still retains the option to implement the digital pound project if necessary, although the chances of implementation are diminishing.
During a hearing before the Treasury Committee in Parliament, the Governor of the Bank of England expressed doubts about the necessity of issuing a new digital currency, pointing out that the success of partnerships with commercial banks in developing innovative payment solutions may render the launch of 'Britcoin' unjustified.
And what the Governor of the Bank of England stated:
If these initiatives succeed, I wonder why we need to introduce a new form of money?
This review comes in the context of a global decline in momentum for government-backed digital currency projects.
In the United States, the administration of President Donald Trump sought to stop the digital dollar project, while the Bank of Korea suspended its pilot program.
In contrast, the European Central Bank continues to work on the digital euro project.
Recent research from the Bank of England shows a decline in the expected benefits of issuing a digital currency, especially given regulatory challenges and concerns related to privacy and financial stability in the event of heavy demand for government digital currency during crises.
