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UK develops research on a CBDC as an alternative to cash

UK CBDC_IFM_Image
The Treasury Department has revealed that it is drafting proposals to regulate stablecoins

The UK is researching a Central Bank Digital Currency (CBDC) as an alternative to cash. The Treasury Department has revealed that it is also working on drafting a proposal to regulate cryptocurrencies in the country.

UK Treasury Chancellor Rishi Sunak said during an official announcement, “New technologies such as stablecoins – privately-issued digital currencies – could transform the way people store and exchange their money, making payments cheaper and faster.

“We are starting a new chapter in the history of financial services and renewing the UK’s position as the world’s pre-eminent financial centre. Our plans will ensure the UK moves forward as an open, attractive and well-regulated market.”

In a tweet, he also said, “We’ll publish a consultation to ensure new privately-issued currencies, stablecoins, meet the high standards we expect of other payment methods.”

The Bank of England and the Treasury Department are considering if central banks can issue their own digital currencies, as a complement to cash.

Many countries have understood the potential of CBDCs and have already begun research in this regard. Countries such as China and Japan have already moved ahead in the race with million-dollar investments already made.

Last month, the Bahamas launched a CBDC claiming it to be the world’s first digital currency for its nearly 393,000 residents. The Bahamas CBDC, termed Sand Dollar, will act as an alternative to physical cash. In December 2019, a pilot programme was started for the Sand Dollar where around 48,000 Sand Dollars were distributed to a closed group of island residents.

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