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Rishi Sunak: 'We're not replacing cash with 'Britcoin''

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Chancellor of the Exchequer Rishi Sunak delivers his 'Mansion House' speech in London on 1 July. Photo: Stefan Rousseau/Reuters
Chancellor of the Exchequer Rishi Sunak delivers his 'Mansion House' speech in London on 1 July. Photo: Stefan Rousseau/Reuters

UK chancellor Rishi Sunak has put to bed speculation the government could be planning to replace cash with a digital currency that has been dubbed 'Britcoin'.

The chancellor wrote in a lengthy LinkedIn post on Monday afternoon that he wanted to lay out the government's plans for remaining at the "cutting edge of technology while also protecting access to cash."

He wrote: "It’s right that we explore the potential role of central bank digital currencies (CBDC) to understand the wide-ranging opportunities and challenges they could bring. 

"A CBDC would, potentially, be a new form of digital money issued by the Bank of England and for use by households and businesses. It would exist alongside cash and bank deposits."

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Noting the joint taskforce the Treasury has launched with the Bank of England on CBDCs he said there are a number of important considerations to think about first and that any digital currency launched would compliment cash and bank deposits, rather than replacing them. 

Read more: 'Britcoin': Central bank digital currencies explained

CBDCs represent a new frontier for central bank stimulus, potentially acting as a conduit for policies such as stimulus checks, emergency loans, and UBI (universal basic income). Central banks could induce more powerful, directed "money drops" to stimulate the economy rather than tinkering with interest rates.

According to PwC, retail CBDC projects appear to be more advanced in emerging economies.

In April, the BoE said the taskforce would explore the viability of a "digital pound", which at the time was dubbed "Britcoin" by the press.

In April, the bank said it would launch a taskforce in collaboration with the Treasury, exploring the viability of a "digital pound", dubbed "Britcoin" by the press.

It said any CBDC would be a new form of digital money that could be used by both households and businesses. It would exist alongside cash and bank deposits, rather than replacing them.

As noted by Sunak, the government and the BoE have not yet made a decision on whether to introduce a CBDC in the UK and will engage widely with stakeholders to discuss the benefits, risks and practicalities of doing so, the BoE said.

Watch: What are the risks of investing in cryptocurrency?

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