UK Treasury and Bank of England starting to sound serious about 'Britcoin'

The Bank of England and HM Treasury have announced a consultation process that will inform a decision about whether the UK should proceed to design and create a central bank digital currency (CBDC). The financial orgs created a taskforce to consider a CBDC in April 2021, and promised to "engage widely with stakeholders on the …

[Anonymous Coward]

National Infrastructure

Means it will over run, hardly work, but cost a lot of REAL tax payer cash.

[Little Mouse]

Re: National Infrastructure

I doubt that it is even expected to leave the ground. I fail to see any actual point in creating a sovereign cryptocoin.

But there's clearly gravy to be had in consultancy & development etc.

[Kabukiwookie]

Re: National Infrastructure

You are most likely correct; the only people benefitting, will be the consultants and executive ordering this waste of money, who's ego will be bolstered because everyon can see that's he's 'hip and with it'.

[Rameses Niblick the Third Kerplunk Kerplunk Whoops Where's My Thribble?]

Re: National Infrastructure

....who's ego will be bolstered because everyon can see that's he's 'hip and with it'

I used to be 'with it', but then they changed what 'it' was. Now what I'm 'with' isn't 'it', and what's 'it' seems weird and scary to me.

It'll happen to you....

</abe>

[Anonymous Coward]

Re: National Infrastructure

> because everyon can see that's he's 'hip and with it'.

I've got to the age where 'hip and with it' means the replacement operation was a success.

[adam 40]

Re: National Infrastructure

Don't you therefore mean "hip and with IT"??? :-)

[unimaginative]

Re: National Infrastructure

The problem is that people who can make money from it will lobby for it, and will convince a lot of people who do not now how the current system works that we are missing out on something and falling behind other countries - China has created the Digital Yuan, and the Eurozone looks quite likely to follow, and there will be others.

The key thing most people do not get is that the UK (as is usual for developed countries) already has a currency that is mostly electronic. Even M0 (the narrowest measure of money supply - notes, coins and balances with the Bank of England) it is about 90% electronic. For broad measures the notes and coins component is much less. That means that we already have all the advantages of a digital currency with a much more secure and reliable system than a new crypto is likely to be.

I am hoping the consultation will come out against it and reduce the pressure.

[Al fazed]

Re: National Infrastructure

And with this information safely stored on a USB stick I will get cracking on that Consulyancy application, how do you spell cuntinsoltaunty ?

ALF

[Inkey]

Re: National Infrastructure

The treasury used to actualy make some money back from the cost of producing notes and coin ...

However as you say it's only 10% of all money, could this be the treasury looking to turn a profit again?

[Stork]

Re: National Infrastructure

Thanks! I was wondering exactly how a britcoin or e-€ would be different from the current reality for the majority of transactions

[cyberdemon]

The problem is that people who can make money from it will lobby for it

> and will convince a lot of people who do not now how the current system works that we are missing out on something and falling behind other countries

Sounds a lot like B****t

[Chris G]

Re: National Infrastructure

If it ever gets off the ground it will crash back down with ransomware or some other nasty, given the UK government's propensity for digicock ups.

[Al fazed]

Re: National Infrastructure

with any luck

ALF

[elsergiovolador]

Re: National Infrastructure

Their palms must now be soaking in grease...

[Al fazed]

Re: National Infrastructure

Their banks are croacking with sleaze.........

[bofh1961]

Re: National Infrastructure

HMG will cock it up on a scale never seen before - test & trace will look cheap before they've even finished a feasibility study for this one.

[Nifty]

Re: National Infrastructure

One snort of taxpayer cash for a deluded project won't do. So that was HS2. Thank goodness, Bitcoin!

[Anonymous Coward]

Coins

We should ensure whichever MP's cousin gets the gig to develop this is paid in Britcoin, so they don't fuck it up.

[Wellyboot]

Re: Coins

and only allowed to convert it into 'real' money at 10% of face value before a successful project completion.

[steviebuk]

No

Everyone is talking about being carbon neutral by whatever date. This is never going to happen if you create a crypto coin. The amount of energy it takes to mine (mint) it will kill your carbon neutral goal.

Just no.

Although, as has been said, the consultants won't say this. They'll rinse them for as much money as they can get. I've even seen a consultant do this is at a previous employee. It was sickening that no one could see it. How smarmy he was, telling them what they wanted to hear until eventually they realised he was adding nothing so they moved on to another consultant but obviously couldn't take back the money they'd already paid him. I only saw one that told them the truth, she didn't last though but left because another job was willing to pay her more. Shame, as she was the only decent and honest consultant they had.

[Ringo Star]

Re: No

Hi

There are other methods instead of proof of work. Proof of stake for example uses way less electrical energy. You can also just create the coins already and not require any computation to be done by the user and just exchange the existing coins via the blockchain... again, no no energy spent on mining.

[Anonymous Coward]

Re: No

mining isn't the only problem

https://digiconomist.net/bitcoin-energy-consumption/

transactions on the block chain are enery intensive too.

So the digital tulips really need to fuck off and die in a fire!.

[Al fazed]

Re: No

I admire the flowers metaphore, "kill 'em with kindness" is parlance in vogue around here.....

ALF

[DRue2514]

Re: No

The existing financial system uses a lot of energy. Think of all the bank branches, HQs and data centres that exist in the UK and across the world. Coins and notes are very energy intensive from the point they are minted then shuffled from businesses to banks, ATMs and vice versa using security trucks throughout their life before finally being destroyed.

Anyone the point of the CBDC isn't just electronic cash. It will bypass banks and enable the Central Bank to have full control. They could offer specific interest rates to individuals or businesses (for example if you have a lot of cash saved they could offer a negative rate to encourage you to spend or even set an expiry date). Lending could be targeted much more finely. They would also have intelligence on every single transaction taking place in the economy which would give them better intel to set policy.

Also the CBDC would not be 'mined'. The central bank can print whatever they like, just like now. And it need not be on a blockchain; just a RDMS would do. The challenge would be total security and 100% availablity.

[doublelayer]

Re: No

"Anyone the point of the CBDC isn't just electronic cash. It will bypass banks and enable the Central Bank to have full control."

You say this as if it's a good thing. I assure you, if they started doing these things, they would have a really big problem.

"(for example if you have a lot of cash saved they could offer a negative rate to encourage you to spend or even set an expiry date)."

Step 1: money leaves their bank and enters other investments. Step 2: investors leave country. Step 3: money goes to other country. Step 4: money doesn't come back.

"Lending could be targeted much more finely."

How finely do you need it targeted? Will this allow people to do things they couldn't already do? If so, will that be accomplished by taking on more risk? What lending do the existing lots of banks not know how to do that just putting all the money in one place makes possible?

"They would also have intelligence on every single transaction taking place in the economy which would give them better intel to set policy."

Run away. Run away now.

[Al fazed]

Re: No

The how do the energy companies retain their dripfeed of cash ?

[DuncanLarge]

Re: No

> Proof of stake

Dont make me laugh. I have yet to see any proof of stake coin that actually works without creating a massive waste.

Chia for example. How many HDD's and SSD's are manufactured, sold and then made to sit there doing nothing useful?

Perhaps a proof of stake system that has me prove I own a tree and it continues to exist may be useful. Good for the environment and far from wasteful.

> no no energy spent on mining

You clearly cant see the wood for the trees can you. So, instead on mining, you manufacture. Both use energy, it isnt rocket science.

You want to know why coind like bitcoin are a problem? Because of idiots that dont understand how to mine. They plowed processors and GPU's into a SYSTEM THAT ADJUST ITSELF TO REACT AGAINST THAT.

Jesus christ we used to be able to mine on a fucking pentium laptop, now because of wankers trying to out think the algorithm adding mor and more power to the network even though 2 weeks later they must do it again as the network catches up, we have this "energy issue".

Thus a successful coin will be one, proof of work or stake, that actively PREVENTS abuse.

[Nafesy]

Re: No

Define "massive waste"…… opening with such a broad, I'll defined statement is a guarantee of a sprawling, broad thread of people talking across each other.

Tron has been running dpos for years...ETH is moving to pos because it's significantly more energy efficient... Both huge networks with it in their best interest to be energy efficient. Dyor before spouting drivel please

[Ken G]

Re: No

How about proof of ownership of 31.1g of 99.99 sterling silver on deposit gets you one Britcoin? They need a catchier name though.

[Stork]

Re: No

Or 454g of 925 silver?

[ex_ob]

Re: No

Poor reason to oppose, simply because most cryptos now are "proof of stake" or use a consensus mechanism that doesnt require a lot of power...

You need to understand the implications of censorship if you want to oppose a CBDC, theyre the only worthwhile arguments against.

[Al fazed]

Re: No

Yeah I agree, 'cos telling the COP(Dickheads) that it doesn't work won't get you any bacon to take home for the wife and SQUIDS.

ALF

[bofh1961]

Re: No

It'd be a major step towards the cashless economy that the government has wanted for so long. Every transaction recorded and tracked without any way of avoiding it.

[elsergiovolador]

Re: No

With IR35 changes in place, this is now only for the big guys. The big consultancies that can afford making substantial donations or are owned by family members of interested parties.

[Al fazed]

Re: No

Russian mafia .........

[Ian Mason]

Re: No

You don't seem to realise that a central bank cryptocurrency doesn't need to be a "proof of work" currency like Bitcoin et al, it will be a fiat currency that is 'issued' by the Bank, just as it currently issues sterling. It will require nothing more energy intensive than a digital signature or three, similar in energy impact to the cryptography being used to convey my words to you.

[steelpillow]

Re: No

Ian Mason You missed the appropriate icon. I have supplied it, hope you don't feel upstaged.

I was about to say, "and you have also spoiled the fun", but I rather think that this one will run and run. Preferably to an icebound server farm in another country altogether.

[Ian 55]

Re: No

No sane western government - or even the ones we have - are going to use a widely distributed database for something as important as 'money'.

The main / only attraction to this is the thought that government will be able to see - ie tax - everything going on in the economy.

For obvious reasons, you don't want everyone to be able to see that your wallpaper cost £How Much!?! and was paid for by the newly enobled Lord Donor.

Similarly, no sane western government is ever going to adopt Bitcoin, with about 1/20th of the entire supply owned by someone unknown who may be dead but certainly isn't Craig...

[OopsAgain]

Re: No

Not strictly true. Different crypto technologies have varying degrees of effort required to run the network, which can be less than fiat (every bank having their own infrastructure). See projects like Algorand for example.

Minting itself also can be in different ways, it doesn't need to be mined like bitcoin depending on the technicl solution.

[Ali Dodd]

Not sure if this is a cryptocurrency

rather just a digital currency, doesn't need to include blockchain or potentially onerous transactions causing huge costs both financial or ecologically.

However with a name like Britcoin I'm sure lit is likely to be a Shitcoin (sorry)

[amanfromMars 1]

Reinventing the wheel takes you nowhere different

So, the Bank of England and UK Treasury plan a counterfeit Bitcoin? Is that not able to be perceived as practically criminal?

[Anonymous Coward]

Re: Reinventing the wheel takes you nowhere different

do you think there's only bitcoin in the crypto currency world? UK isn't the first to do this either, several countries have already done it, most notably Estonia. They seem to think it will work for them. Why they don't use bitcoin I dunno, I suppose they don't have control over bitcoin.

[CommanderGalaxian]

Re: Reinventing the wheel takes you nowhere different

You do get that a crypto called BritCoin actually already exists (for several years)? So the UK Gov and Bank of England will potentially be trying to fool the mug punter with their counterfeit version.

[doublelayer]

Re: Reinventing the wheel takes you nowhere different

It's not really called BritCoin. As the article said, "Wags quickly labelled the currency "Britcoin". Not much has been heard since." It hasn't got a name yet, and they're unlikely to do something so simple. Especially if whatever the original BritCoin is has trademarked it. My guess is that it will have two names: the long technical name (Digital British Pound Blockchain Currency System or DBPBCS), the official product name which will sound stupid and have been purchased at great expense from a consultant, and it will actually be called the pound when not called "that new system that keeps breaking".

[ex_ob]

Re: Reinventing the wheel takes you nowhere different

Bad argument. Not all cryptos are bitcoin.

There are very good arguments to oppose a CBDC, but you need to go and research them -- don't offer these weak arguments that are easy to defeat.

[Al fazed]

Re: Reinventing the wheel takes you nowhere different

Yes but CBDC is too close to CBD so it already has seedy conotations, it's possibly typosquatting, and I can't remember the other stuff, and the coninsultation period has even begun.

Marketing, that's all that's needed, good marketing........

The most important part of this venture,

ALF

[Steve Channell]

Will happen, will be first, will succeed, but will be more like a database

CBDC Will use digital ledger technology (DLT), but will be nothing like bitcoin: There will be no mining, and participating nodes will be limited and pre-trusted.

Unlike bitcoin or distributed database a CBDC DLT can be extremely fast because DLT time is relative, and forking provides distributed concurrency. Bitcoin hashing provides a trust mechanism (proof of waste), but doesn't need to be as expensive if nodes are pimited

[ex_ob]

Re: Will happen, will be first, will succeed, but will be more like a database

The blockchain is inherently slow and prone to attacks. Any form of critical infrastructure that must be exposed to public networks has a giant risk slapped on it, and if that network happens to provide the nations currency then you better be very careful.

CBDC's are a poor idea because of censorship and national security.

[Steve Channell]

Re: Will happen, will be first, will succeed, but will be more like a database

"Proof of work" is inherently slow, but slowness prevents excessive forking (an issue for Ethereum relative to slower bitcoin). A CBDC would only include clearing banks, other central banks, and some wholesale banking parties - no retail transaction. With a smaller group, simpler/faster hashes can be used.

In the retail channel, digital removes friction for large payments, and automates settlement for smaller payments.

The Bank of England will be amongst the first, because (unusually) it is not the only issuing bank for sterling£ notes (RBS, BoS, Ulster Bank etc also issue £ notes).

[jmch]

Re: Will happen, will be first, will succeed, but will be more like a database

Current digital transactions require a trusted intermediary (bank) which takes responsibility for the security, in return taking a cut somewhere along the line.

The idea (one of) behind crypto is to cut out the middleman to reduce transaction cost and time. Sadly an implementation like bitcoin did neither... and its difficult to implement security on a consensus based public ledger as block chain.

[NiceCuppaTea]

I can almost hear the big wigs at Crapita wringing their hands from here!

If my understanding of how digital currencies work is correct the basic way they all work is through the "owner" of a specific token signing a transfer request of that token to another user using their private key ( or one derived from it )???

What happens to all of these digital currencies when said encryption alogrithm is broken? Please dont tell me oh x y z algo is completely unbreakable because we have all seen "unbreakable" algos come and go in the past.

Im not sure of the specifics but say BTC is based on a ECDSA function to sign the tokens. When (not if) ECDSA gets broken does the whole ecosystem fall apart or is there a built in mechanism to change to a different cryptogrphic standard? Would that not invalidate all existing private keys (users wallets) and effectivly reset everyone to zero? if an encryption algo has been broken then how would you verify the new algo private key has been generated and belongs to the person who had the original now cracked key without a valid / known source signature? Where would the instruction to change algo come from as there is no central command and control?

Its all well and good having these risks present when its individuals and hedge funds cocking around with money but when a central government of an entire country embraces these risks it has a much wider ability to send a country into anarchy.

[DuncanLarge]

> What happens

What do you think? The shit hits the fan thats what.

Till then be happy that its unbreakable.

[jmch]

"Please dont tell me oh x y z algo is completely unbreakable because we have all seen "unbreakable" algos come and go in the past."

It's quite possible for an algorithm to be unbreakable, and AFAIK it's even possibly to mathematically prove it. The implementation in code of the algorithm, however....

[ex_ob]

The obvious problem here is that with a programable currency, the government will not be able to resist imposing policies through the currency.

So if they think you shouldn't donate to xyz political movement because they have decided theyre all "haters" or something, you just wont be able to donate.

If you want to buy something they think you shouldn't have too much of because of "climate change", i.e. a Sunday roast, then again you're screwed, because sorry you've had too many Sunday roasts already this year.

If you combine this with lets say a digital ID and an IoT that they have the "admin keys" to, then really kiss goodbye to any freedom whatsoever. You truly will be in the digital gulag... which is of course the opposite of the dream we all had for the Internet.

[elsergiovolador]

Tory party has been heavily influenced by neo Marxist behavioural economists. They think they can "nudge" people into desired behaviours to create a perfect society.

This is just another one of those that likely will end up in mass graves. Tories are blinded by the thirst of power and they cannot pass on the ability to control everything an individual does.

[SundogUK]

Do you seriously believe that the Labour Party, Greens or SNP wouldn't be all over this as well?

[Al fazed]

Especially if this will be expected to run as an App on your phone

ALF

[RowlyB]

So wrong on so many levels, digital coins should be banned if we are serious about saving the planet..

[Anonymous Coward]

£sd

This is the perfect chance to roll back the clock by creating a non-decimal digital crypto currency. Just imagine the happiness and surge in English pride it would create!

[I ain't Spartacus]

Re: £sd

We could call it a thruppeny-bit-coin

'Alf a sixpence, is better than none...

[Al fazed]

Re: £sd

And people on benefits won't be able to cash in their Giro's without a suitable digital device, most likely running Windows 11.........on an iWatch,,,,,

ALF coat

[Ringo Star]

It seems to have been just a passing fad in Estonia. It seems odd they're looking at a launch date some time in the late half of the decade, the technologies and other implementations by governments are already out there. I'm not sure what they plan to discover that hasn't already been discovered before they actually go out and do it.

[Christoph]

Just exactly why is this needed?

Because obviously the currency we already have can't possibly work for electronic money transfers, so this new currency is desperately needed to, errr, um, oh yes - to hand yet more Sagans of real pounds to the consultants to create fake pounds.

[Anonymous Coward]

Re: Just exactly why is this needed?

Quite. If I pop over to the bank to look at my account, I don't see tiny flecks of gold in a vault.

What they are really on about is a ledger and that is quite a different thing.

[Howard Sway]

Re: Just exactly why is this needed?

The stated use case is "for use by households and businesses for their everyday payments needs".

Pointing out that a currency already exists for this use is evidently beyond the bitcoin-bedazzled.

[batfastad]

Re: Just exactly why is this needed?

Noone who is seriously _in_ to cryptocurrencies thinks CBDCs (Central Bank Digital Currencies) are a good idea at all. It's mostly the usual circus of consultants looking to liberate some tax-payer funding and legacy financial institutions pretending to do something about their under-performing asset class.

[Al fazed]

Re: Just exactly why is this needed?

It's so the sleazey politicians, etc. can keep all those embargo breaking arms and tech deals to despotic countries off the visible records, of course. It has to be the biggest advantage to British Soveriengty. No one will ever know who has been paying for all the crack cocaine, heroin and cannabis entering Britain since it became popular in the 60's.

I'm sure the CIA, etc will be aware of similar advantages around denial plausibility .... funding stuff ............. guns for dope, etc.

I'll leave it to your imaginations what you can get up to with a crypto currency, mine is too fertile .......

ALF

[Doctor Syntax]

Put the curse on it

Just get BoJo to declare it to be world beating. Then we can just ignore it.

[deive]

The entire point of crypto is to validate transactions with no central authority.

If there is a central authority then this is needless, we already have a much better system for this!

[batfastad]

Exactly this ^.

Also let me guess, all these Central Bank Digital Currency projects will be backed by the Central Bank/Government money printer, so you'd be no better off compared to the current system of your bank balance being just some numbers stored on a mainframe.

[Ken G]

Bullseye!

You can sell off the Bank of England if it's not needed as a central bank, because blockchain.

[Anonymous Coward]

ShitCoin might be a better name for it

... given the current Government's preoccupation with Sewers & Sewerage.

Playing these sort of financial games have resulted in Sharp Haircuts in the past.

Crisis of the Ancien Régime: Financial crisis.

[Mike 137]

"A new form of digital money for use by households and businesses for their everyday needs"

The old form was called a bank card (whether credit or debit).

The new bit would be that, instead of just retailers and your bank knowing about your transactions, the government would.

That's progress.

[Anonymous Coward]

Please....

Put the queen of carnage in charge.

I'll be the one with popcorn....

[DuncanLarge]

12 credits please

Can we call them credits?

Then every scifi I have ever watched becomes just a little more real.

[steelpillow]

Britcoin

See icon

[Anonymous Coward]

Big opportunity

Just fund the budget with NFTs.

[babaganoush]

why?

I could list around 2,000 proposals for major national infrastructure projects that have much more merit than a Britcoin. So why?

[Anonymous Coward]

Home improvement

Can this be used for paying for home improvements, holidays and private jets and such like without attracting undue attention? Just asking for a friend

[MrTuK]

Digital money !!

Well I must be in the minority, I would never put any app on my Samsung devices that requires the use of my bank or credit cards, I just don't think they are secure enough except for Google to collect what data it tries to. I use my cards in Firefox on my Linux system and would never use any other damn browser as most are Google Chromium based and as already stated I don't trust Google. So using a digital currency that the UK Gov can track is not what I would like which is the only reason I can see that they want it otherwise why not just use the current services available already. China uses it so it can monitor its own people and is trying its damn best to get people to adopt it, basically it wants to know what everyone spends their money on and if it decides it doesn't want you to purchase whatever you want it can block the transaction, especially if you have lots of dosh so no leaving the country purchasing a plane ticket or transferring your money from HSBC to some foreign bank account as it will all be in the China's Digital wallet and it will hold the purse strings ! I don't often use actual cash but i do sometimes and I dont want to lose that choice although seeing the way our utopian society is going maybe that choice will be taken away from me and I don't have cards with NFC either !

[TheProf]

Thanks Douglas

ROOSTA:

I prefer hard cash. If you can’t scratch a window with it I don’t accept it.

[Slx]

Hmm, if it’s anything as well organised as the printed currency you won’t be able to use Scottish or Northern Irish issued coins in England, without some jobsworth calling the police and accusing you of attempting to passing fake currency …

[MrGreen]

A Disaster Waiting to Happen

He who holds the money, holds the power.

When (not if, because this has already been decided) the UK CBDC is implemented then every UK citizen still clinging on to the pound will have ZERO power. If the government doesn't approve of something you like doing or doesn't' want you to do something, all of a sudden your digital wallet will be frozen.

Dear Mr Green, you've had too much beer this week, you've eaten too much meat this week, you were caught doing 31mph in a 30mph zone, you were caught on CCTV at a demonstration, your ungreen diesel car has done too many miles this week, you've purchased too much sugary foods this week, you've had too many holidays by aeroplane this year, you haven't exercised enough this week, you owe us 52p tax, you haven't had a vaccine this week ......................

Digital payments (tracking/surveillance) will also be used in conjunction with facial recognition. Therefore, you could also be denied access to buildings, transport etc. This is already being trialled in China.

A 'Centralised' digital currency is also a massive target for hackers. Sadly those who will be fooled in to launching this won't understand the difference between a decentralised blockchain technology and a new shiny single point of failure coin. However, I'm sure an MP's mate (landlord at his local pub) is an expert on Shitcoins.

[Nafesy]

Or...

Bank of England could just use the Ethereum network and issue their own erc-20 token... Job done.

[MrGreen]

Re: Or...

Ethereum isn't really decentralised and the gas fees are ridiculous so it definitely qualifies as a shitcoin.