Based on the plans presented by the British Central Bank, the digital pound will be a new type of currency, however, it will be significantly different from cryptocurrencies in several features.
According to the detailed description published Tuesday evening, the biggest difference is that unlike cryptocurrencies created by private distributors, Digital pound It will be issued by the Bank of England and supported by the British government.
The British digital currency will also be called the pound sterling and its value will be stable, just like physical banknotes, meaning ten digital pounds will always be worth the same as a ten pound note.
The British Central Bank tightened its information on Tuesday.
Digital wallet for digital money
According to the Bank of England, the main difference is that the digital pound will not replace cash.
The Bank of England says that new forms of money are on the horizon, some of which may threaten financial stability in Britain.
However, the money issued by the Bank of England is considered a pillar of the stability of the British financial and monetary system, the British central bank says in its information on Tuesday evening.
Digital money can be stored in digital wallets and paid from. It will not be a bank account, and will not earn interest in the same way that cash kept in a trouser pocket does not earn interest, but will simply be used for the same daily payment transactions as physical cash.
– Emphasis on Bank of England experts.
What is the difference between Bitcoin and digital money?
Sir John CunliffeThe Deputy Governor of the Bank of England confirmed, at a financial event in London on Tuesday evening, that the digital pound, if introduced, would have nothing to do with cryptocurrencies such as Bitcoin.
Sir John Cunliffe emphasized that most cryptocurrencies are largely speculative, More like a betting toolits value is subject to extreme fluctuations, precisely because “there is nothing behind it”,
It has no intrinsic and real value and is therefore not suitable for general payment purposes either.
“However, the digital pound will be a safe and reliable form of money that households and businesses can use in their daily transactions, in the same way as current banknotes issued by the Bank of England,” the Deputy Governor of the Bank of England said.
If a decision is made to introduce a digital pound, creating the infrastructure will take years, so the introduction of the new type of money will be due in the second half of the decade.
