The U.K. will consider exploring digital currency, according to a recent announcement by the Bank of England and HM Treasury. A joint task force is currently reviewing the risks and practicalities of the idea, while officials will be consulting with key stakeholders like banks, payment providers and tech companies.
For now, what’s being considered is not a replacement for cash, but “a new form” of virtual currency that would co-exist with banknotes and deposits. Some experts have suggested that the implementation of digital currency could help lower transaction costs and protect people from unstable private payments systems. There is, however, the chance for it to diminish the status of central banks that help support the economy. It’s also worth noting the U.K. is not assessing the use of a crypto asset, where the value can be highly volatile compared to national currencies. Furthermore, the Bank of England has not come to any decision with its use and is simply conducting research before committing to any consensus.
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