Cash and loose change in our pockets could be a thing of the past if Rishi Sunak has anything to say about it.
The Chancellor is reportedly pushing plans to introduce a new digital currency called Britcoin which could forever change how we spend.
Essentially, the Britcoin would be a digital version of the physical currency we currently use – the British pound sterling.
So, as an equivalent, the Bank of England would want to control it in the same way they do now with sterling too.
Insiders at The Bank of England have described the proposal as the biggest upheaval in the monetary system for centuries, the Daily Mail reported.
With the rise of cryptocurrencies such as Bitcoin in recent years, the Treasury is apparently keen to look into the possibility of creating their own.
However, Britcoin would be different from existing cryptocurrencies as it’s value wouldn’t swing as much due to being linked to the value of the pound and backed by the central bank.
A taskforce of Treasury and Bank officials has been set up look into value of introducing Britcoin – known as the Central Bank Digital Currency and will report their findings to the Chancellor by the end of the year, according to the paper.
As reports of the plans emerged on Sunday Britcoin began trending on Twitter, with users sharing their thoughts on the prospective cash alternative.
Many weren’t too thrilled about the idea and made their feelings known.
Can we replace Rishi Sunak with literally anything else, thanks https://t.co/ebjdpyPmEJ
It is worth noting that other countries are also considering similar plans themselves. Notably, China, the US and the European Central Bank have all hinted at making their own digital currency.
So what are the pros and cons?
Britcoin supporters believe it would beneficial to the UK if the country were to face a fresh financial crisis. This is because the Bank of England could boost the economy by paying the currency straight into people’s bank accounts, rather than relying on quantatative easing.
It would also make online banking and transfers much quicker – saving time and money in the long run as a result.
Smaller business potentially could benefit as well since a digital currency would cut their banking costs.
However, some critics have shared their worry at possibility of the digital currency causing more financial instability within the economy – it would be new territory for the Bank after all.
Consequently, economic regulation such as setting interest rates could prove more difficult for the Bank.
All in all, it’s a complex issue, and one we still need to get our heads around.
In the meantime one question we’d ask is who carries cash these days anyway?