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consultations in Britain to launch its own currency

Bank of England takes next steps in a digital money plan

 The Bank of England is discussing with the Treasury, the possibility of launching a digital currency for the Central Bank of England.

Evaluating the design of a new type of digital currency and its possible benefits would be a step forward in the possibility of launching a British digital currency.

Households and businesses will use the new currency in addition to cash and bank deposits, without replacing it.

No decision has been made on the use of such a currency in Britain yet.

But the consultations, which will take place in 2022, will form part of the "research and exploration" phase, and will help the bank and the government develop plans over the next few years.

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Central banks around the world are developing or exploring digital currencies, after the emergence and spread of cryptocurrencies such as Bitcoin.

consultations in Britain to launch its own currency
consultations in Britain to launch its own currency

China, for example, is at the forefront of this race, and is in the process of testing the digital yuan in major cities such as Beijing, Shanghai and Shenzhen.

On Tuesday, the governor of the People's Bank of China announced next steps that include improving protection of currency privacy and its interaction with other payment instruments.

Britain plans to move towards digital currency

The British digital currency (CBDC) is not yet as advanced as the Chinese effort. The earliest date for the launch of this currency is in the second half of the decade.

The consultation paper will set out an assessment by the Treasury and the Bank of the state of central bank currencies, before deciding whether or not to continue.

A statement issued by the British Central Bank said that "technical specifications will follow the consultations that will explain the proposed engineering concept for CBDC.

Finance Minister John Glenn said individuals and businesses would use the central bank's digital currency to meet their daily payments needs and help Britain stay at the forefront of innovation and technology in the financial sector.

In July the European Central Bank took a first step towards launching a digital version of the euro, beginning a 24-month investigation phase, followed by three years of implementation.

And the pace of work on the digital euro accelerated, after Facebook unveiled plans in 2019 to create its own currency. And "Facebook" later reconsidered the project of its currency, "Libra", after strong opposition from the projects, and changed its name to "Diam".

While China was ahead of the

's moves, the US Federal Reserve was more skeptical.

Some central banks have warned that widespread use of digital currencies could deprive banks of cheap financing from consumer deposits.

Nigeria was the first African country to launch a trial of the CBDC currency last month.

In September, El Salvador became the first country to use the virtual currency Bitcoin as a legal currency, along with the US dollar.

This led to widespread protests, after demonstrators feared that this would cause instability and inflation in the country.