Central banks and governments are seeking to create their own centralized cryptocurrencies in an effort to keep up with the new demands of society. The developing nation of Laos has begun testing its own digital currency to reduce financial exclusion within the country, and the United Kingdom is working on launching its own CBDC, a digital version of the pound sterling.
Although an official name has not been announced, the future “britcoin” may cause confusion due to its similarity to the name of the most popular cryptocurrency, Bitcoin. CBDCs do not aim to directly compete with cryptocurrencies, but their implementation may reduce the appeal of these as a means of payment, although not as an investment.
The UK’s Department of Economics and the Bank of England have announced that they have started a public consultation period, which will run until June 7th, to receive opinions from businesses and citizens on the possibility of introducing a digital pound sterling. They have already been investigating this option for some time. According to authorities, this digital currency would be used to make payments through mobile applications or digital wallets developed by the private sector, but not for savings since it does not generate interest.