The UK is considering creating a digital currency backed by the country’s Central Bank. On Monday, the Bank of England and the Treasury announced a team of experts who will evaluate the benefits and risks of a digital currency.
UK’s Central Bank aims to use the digital currency to future-proof the sterling against cryptocurrencies and enhance the nation’s payment system. In addition, a digital currency will reinforce Britain’s position as a global financial hub.
The Guardian reports that the digital currency will be a new form of digital money that will exist alongside cash and bank deposits rather than replace them.
UK is still far off from an official digital currency. The nation plans to engage all the relevant stakeholders and examine whether the digital currency will serve a valuable purpose.
Nations around the world have shown keen interest in digital currencies. China is leading the way in developing a Central Bank-backed digital currency. The country plans to test the newly created currency with foreign visitors during the Beijing Olympics in 2022.