As digitisation continues to overhaul many aspects of society, the development of a centralised digital currency is one of the more controversial and often misinterpreted headlines.
The so-called “Britcoin” almost sounds like a joke, but it may very well become a reality. Below we delve into what it is, the impact it could have on society and when it may come to fruition.
What is “Britcoin”?
To explain this concept most simply: “Britcoin” is just a digital version of the pound. This type of currency is known as a central bank digital currency (CBDC).
It’s not designed to replace cash (just yet, anyway), although it’s a good sign of where financial systems are heading.
Blockchain technology and the rise of decentralised cryptocurrencies, which bypass central banks entirely, have driven financial institutions to devise their own digital alternatives.
In the long term, banks are hoping that central digital currency will reduce the cost of managing physical money and make banking more secure and transparent.
It’s not just the UK exploring these avenues. Much of the developed world is taking similar steps to create a digital version of their currency.
How could “Britcoin” impact society?
The digital pound is being designed for use in day-to-day transactions and microtransactions. It won’t be for savings and investments (at least not early iterations) – so the way people build their savings won’t be impacted.
It supposedly offers a more stable alternative to volatile cryptocurrencies, although many won’t be happy that it’s overseen by the central banks.
“Britcoin” has the potential to revolutionise an already much-transformed financial sector, changing the way money is processed and handled from institutions through to individuals.
Many have criticised the concept over data privacy and monitoring concerns. Some claim that welcoming “Britcoin” would signal the end of financial privacy and independence as we know it.
Will “Britcoin” come into operation, and when?
The proposed digital currency is currently in the consultation phase and is likely to be in the design and planning stage until at least 2025. There is still a chance it could be rejected.
Plans are being met with some resistance from various parties, and public perception will always be a sizeable hurdle to jump – although that’s never deterred the government in the past.
Some journalists estimate that a fully operational digital currency system could be in use by the end of the decade, so it’s not that far away.
What are your thoughts on “Britcoin”?