Cryptocurrencies are in the midst of hundreds of controversies, if not thousands! These high-yielding financial assets have had a difficult journey right from the start.
The main reason is the lack of a central authority (decentralized payment network), and therefore governments around the world are afraid of it. Most governments fear using Bitcoin for illegal activities such as money laundering, terrorism, and the illicit purchase of products.
As governments try to fight the decentralized component of cryptocurrencies, they are using the underlying technology, blockchain, to create their digital currencies.
To date, many countries have launched their own cryptocurrencies
Here are which ones:
- Dubai: Emcash
- Venezuela: Petro
- Estonia: Estcoin
- Russia: Crypytoruble
- Sweden: E-Krona
- Japan: J-Coin
What is Britcoin?
There are many other developed and developing countries that are planning their own digital currencies. The latest to join the trend is the UK. In the recent development, UK authorities are exploring the possibility of creating a new digital currency touted as “Britcoin”.
British Chancellor Rishi Sunak had previously formed a group of Bank of England and Treasury officials to review the proposal. In the latest statement, Rishi Sunak said Central Bank Digital Currency (CBDC) will not replace cash; they will coexist.
“Any potential UK CBDC would exist as a complement to cash and bank deposits, and not as a substitute. We know that money remains vital for millions of people and we are fully committed to ensuring that people across the UK can continue to access it. "
Rishi Saunak's strategy for economic push?
The rapid development of e-commerce has accelerated the transition to digital payments. According to Sunak, the digital currency is not meant to reduce the use of cash, but to help during financial crises by allowing the Bank of England to boost the economy by paying Britcoin into customer accounts.
Adds Sunak: “We have already legislated to make it easier for companies of all sizes to offer cashback without a purchase (in the Financial Services Act 2021). And in early July, we also launched a consultation, which seeks views on proposed new laws to make sure people only have to walk a reasonable distance to pay or withdraw cash. "
He continues: "So by supporting innovation and technology while ensuring continuous access to money, we ensure we have a sustainable and innovative payments landscape for decades to come."
However, many criticized the move as it could lead to greater financial instability and make it more difficult to regulate the economy.
Additional experts said it can lead to higher lending rates due to the cash-consuming CBDC available for high street banks to lend to borrowers.
“We want to make sure the UK is at the forefront of innovation and technology in financial services, so it's only fitting that we explore the potential role of CBDCs to understand the wide-ranging opportunities and challenges they could bring,” says Sunak.
“The government and the Bank of England have not yet made a decision on introducing a CBDC in the UK and will engage extensively with stakeholders on the benefits, risks and practical ways of doing so,” the BoE said.