Monday 26 July 2021 6:17 pm

Rishi Sunak: 'Britcoin' will not replace cash

Rishi Sunak has hosed down any suggestion that the government could replace cash with a digital currency dubbed “Britcoin”.

Sunak said in a LinkedIn post that the government has “not yet made a decision on whether to introduce a [Central Bank Digital Currency] in the UK”, after reports over the weekend suggested the chancellor wants to introduce the new currency.

The post-Brexit Taskforce on Innovation, Growth and Regulatory Reform (TIGRR) review led by Sir Iain Duncan Smith recently called for a digital pound pilot.

The government also launched a taskforce into the issue in April.

The Mail reported that Sunak was on board with the TIGGR review and that the Treasury was interested in examining the idea.

Sunak said today that any “potential UK CBDC would exist as a complement to cash and bank deposits, and not a replacement”.

“We know that cash remains vital for millions of people and are fully committed to ensuring people across the UK can continue to access it,” he said.

“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.”

The Treasury and Bank of England recently created a joint taskforce to consider whether the central bank should launch a UK digital currency.

Proponents of the measure argue that it could cut banking costs for small firms and allow the Bank of England to pay people directly into their accounts when it embarks on a stimulus programme.

It could also make it easier for money to be moved around the financial system.

Its detractors say that Britcoin could create greater financial instability and make it more difficult for the central bank to have an impact on the economy through monetary policy.