Bank of England ponders minting 'Britcoin' to sit alongside the Pound

The Bank of England and HM Treasury have formed a Taskforce to "coordinate the exploration of a potential UK Central Bank Digital Currency" (CBDC). Let's call it "Britcoin". A Bank of England announcement quickly points out that no decision has been taken to greenlight Britcoin and omits any mention of why the time is right …

[amanfromMars 1]

Bank of England Goes Swinging

Better late to the orgy than never, eh?

[oiseau]

Re: Bank of England Goes Swinging

Better late to the orgy ...

And what will you do after a very vicious and ultra-high-order antibiotic resistant variant of The Clap starts to rot you from the inside out?

Because that is exactly what will happen.

Whoever came up with this hare-brained idea should be shackled and thrown in a deep tar pit.

O.

[Chris G]

Four new bodies

I take it from the fact that four committees have been assembled the Bank or government has no intention of going down the Digital UK Currency road any time soon.

The four groups will have differing opinions on every aspect of designing and implementing a system, many of them will have no idea of what a Blockchain is and at least a few will argue about which image of the Queen's head to use on the coinage.

Eventually, a fifth committee will be created to take on board or discard notions from the first four, will disregard most of the recommendations and then rush out an insecure iteration using a private company that normally makes toothbrushes for an undisclosed figure in the billions.

Where is the Me a Cynic' icon?

[Arthur the cat]

Re: Four new bodies

Where is the Me a Cynic' icon?

It's the vulture one up in the header. Applies to virtually all articles and comments.

[newspuppy]

Re: Four new bodies

Which image of the Queen's Head?

Do you not understand how this whole crypto currency works?

For a successful Britcoin we need to determine which Queen's Corgi shall be represented on our Britcoin. That is the critical part.

The icon is what I need lots of to understand this.....

[TRT]

Re: which Queen's Corgi shall be represented

... so it's going to be called dogcoin then?

[Inventor of the Marmite Laser]

Re: which Queen's Corgi shall be represented

And obviously mining for it will be termed 'dogging'

[Anonymous Coward]

Re: Four new bodies

sounds a lot more sensible course of action that actually making a crypto

[Rob Daglish]

Re: Four new bodies

You missed only one thing - the toothbrush company MD will be someone who went to school with some MPs niece/nephew.

[John Sager]

They would be better off thinking about how to destroy bitcoin. It's a resource disaster and that will only get worse as bitcoins become harder and harder to mine.

[MutantAlgorithm]

The very next story on the Radio 4 news this morning was about the govt setting CO2 reduction targets! Although I suppose if we cover the entire country in windmills we might generate enough to cover our delightful Britcoins! At least we'll all be able to recycle all the copper we have lying about...

[Aitor 1]

BITCOIN = GOLD

Bitcoin is crap and transactions, but so is gold.

Look at what companies that say that trade with BTC actually do: most of them just "keep it for you", hoard it, and essentially use it as you would use gold: to issue tokens based on the BTC/Gold.

for that use, BTC is ok, and most of the power does not go towards mining BTC, but ETH, Monero, Dogecoin, whatever.

[N2]

Re: BITCOIN = GOLD

Please donate all your 'crap' gold to me.

[Claptrap314]

They know how to destroy bitcoin. It was obvious when the first proposals came up on Cypherpunks in the 90's, and it is obvious today.

But there is always a cost to such things, and so far, they have not cared to pay the cost.

Really, this is why I've never been into coin. If the time comes that they do care, and it is FAR from clear that matters will actually get to this point, it will be decisive.

[Jan 0]

Global Warming?

Is it possible for Britcoin to have a lower carbon footprint than the current system of financial transfers? If not, it needs stopping now.

[Nifty]

Re: Global Warming?

The legacy system will stay so we'll end up with both systems. China's Bitcoin mining industry is apparently using the power of a small nation.

But I am wondering: Could these primes being mined be used for more than one application? E.g for more than one blockchain coin platform, or for some scientific purpose?

[pklausner]

Re: Global Warming?

There are no primes or in any way interesting numbers being "mined".

The first miner who manages to create a valid block for the chain can spend the bitcoin reward assigned to himself in that new block.

[Adelio]

Re: Global Warming?

I presume the Government would "mine" the coins and then "sell" them on.

Why do people think it is a good idea to "mine" these things?

[Claptrap314]

Re: Global Warming?

The Greater Fool. (The Greater Fool.)

[Freddie]

Re: Global Warming?

I would think that as a central bank has little need for distributed ledgers it wouldn't use blockchain tech in any way. As such, it wouldn't involve "mining" of any kind and so wouldn't be as energy intensive as BTC, etc.

The horrific name, however, is in danger of lingering like a bad smell.

[bazza]

Re: Global Warming?

Bitcoin would have a lower carbon footprint, if there were no financial reward for checking the integrity of the block chain that underpins it. That way you'd not get all and sundry piling into it. There would then need to be a limited number of trusted outfits checking the block chain, so then it would be better from a CO2 point of vew. That would also speed up transactions, as it would take less time for those few outfits to agree that a transaction had taken place.

The problem then is that those trusted outfits look very much like banks, with the block chain becoming an over-engineered (given the high level of mutual trust) way for them to agree what transactions had taken place.

[JohnMurray]

......using countries as tax havens to avoid taxes is so pre-21st.....

[Anonymous Coward]

What could possibly go wrong?

Just asking for a banana republic with no bananas.

Could it be the South Sea Bubble all over again?

[Gomez Adams]

Re: What could possibly go wrong?

Or the Dutch Tulip Mania. :/

[Alan Brown]

Re: What could possibly go wrong?

or railway mania

[Anonymous Coward]

for use by households and businesses

> for use by households and businesses

So, in other words, completely and utterly indistinguishable from electronic bank transfers as far as the typical household or business is concerned.

What exactly are the benefits then - as opposed to simpler & easier payments of existing pounds?

(icon - we need a rhetorical question icon)

[Dave Pickles]

Re: for use by households and businesses

At present money is fungible - if I pay £100 into my bank account and later withdraw £100 it's impossible to say that I withdrew the exact same money that I paid in. Britcoins presumably have serial numbers which can be tracked.

[Pascal Monett]

The only advantage is hinted at in the article : surveillance.

There is no reason to create a "digital" currency. Our currency is already digital for the vast majority of transactions. The only little part that uses cash is when you go buy a baguette or a loaf of bread at the bakers.

It is exactly what they want to know. What we do with our cash. There is no other possible reason.

In Europe, money is digital. I use my VISA card for practically everything. I have no use for another currency of any kind, and I will buy my baguettes with a few pieces of real coin.

I see no reason to change that that will benefit me.

[Freddie]

Re: for use by households and businesses

I saw GNU Taler recently: it aims to recreate the anonimity of cash but with a digital currency. It seemed very impressive but I'm not sure what's going to motivate users other than privacy and perhaps security, and we all know how well those sell to the masses. :(

[boggles]

I hope its going to be less resource hungry than other crypto currencies otherwise we might need a few extra nuclear power stations to keep it running ;)

[Anonymous Coward]

Not all cryptocurrencies are created equal.

According to a study conducted by Stanford and Stockholm University, XRP uses around 1000th of the electricity required by the existing Visa network in the US.

[AMBxx]

Could that be just because nobody uses XRP?

[Blazde]

The VISA vs XRP comparison in that paper is ridiculous. At every single point they compare apples to oranges, and always in the direction that favours XRP.

(The comparison with Bitcoin and Ether is fairer. Of course, no mining no crazy energy usage)

[Captain Hogwash]

Re: "exist alongside cash and bank deposits, rather than replacing them."

For now. I think we can all see where they'd like this to go in the longer term. Every transaction publicly visible for ever.

[katrinab]

The vast majority of £ are already digital money. We have £94.6tn of notes and coins, and £284.2tn in bank balances.

What is Britcoin going to do that we don't already have?

[Stephen 1]

£378.8tn? I wish.

By my maths that would be an average of ~£5.4M each for everyone in the UK, including children.

It would also mean the government could pay off the national debt with a one off tax of 0.5% of wealth, so what's stopping them?

[Arthur the cat]

It's not just people that have bank accounts. Businesses, partnerships and charities do as well. Other bank account holders left as an exercise for the reader.

[sitta_europea]

Exactly. Somebody in government/BOE has lost the plot.

[Anonymous Coward]

Most likely Thiel has been having a chat as he worms his way even further in.

[Phil O'Sophical]

Bank-backed cyber-currency seems to be pointless. Surely the main reasons people want Bitcoins are:

- You can create them using other people's resources, so they are nominally 'free' to obtain.

- They're still going crazily up in value w.r.t. real currency, so look like a good investment.

If we end up with a cyber-currency that is tied to sterling, and managed by a bank, both apparent advantages evaporate.

[Aitor 1]

Cryto usefullness

The advantages are:

1. They are limited, and minting is expensive. Printing dollars or pounds is not, and the GVNTs keep doing it to your detriment.

2.You do not need a central bank, hey, you just need a network!

The importance of 1 cannot be overstated. Do you complain about real state prices? well, you cannot invest in punds or dollars, or euros, as inflation will eat it.. so many people invest in real state to save themselves from that problem --> Houses are now mostly investments, therefore price goes up a lot.

Of course the problem is that BTC as it is limited in quantity, will go up and down in value with the economy...

[Binraider]

Re: Cryto usefullness

Houses are also limited in quantity! And will continue to skyrocket with the value of the economy... (POP).

[TRT]

Re: Cryto usefullness

Brickcoin.

[sgp]

Re: Cryto usefullness

Bitcoin isn't limited. You can just keep adding zeroes behind the decimal separator.

[Anonymous Coward]

And may they experience the same hell the rest of us

who actually understand the power of blockchain have in trying to explain it to people with no ability to grasp the unfamiliar.

[TRT]

Re: And may they experience the same hell the rest of us

I wish someone COULD explain it in a way that I can understand. Every time someone tries, I'm just... OK. So that's how it WORKS... now, what does it DO? What's it FOR?

I'm trying really hard to understand, honestly.

[Jon 37]

Re: And may they experience the same hell the rest of us

Blockchain is a public record-keeping system for when you can't trust any one person. So you get a load of people using their computers to keep the records, and deliberately design the system to be hugely inefficient using loads of computing power. The system is designed so that over 50% of those people (measured by "amount of compute power") would have to collude to subvert the system.

For Bitcoin & clones, this is a not-totally-unreasonable approach. You can have a money transfer system that no one party can control. Although the environmental impact is horrible.

For everything else, it's a stupid design. There will always be one party you can mostly trust, who can run a centralised database. If you want to stop people fiddling the records, there are simple cryptographic approaches to detect that, and there is always the option of running your own server with a copy of the data. (E.g. see how Certificate Transparency Logs work).

[NonSSL-Login]

Re: And may they experience the same hell the rest of us

The blockchain is a decentralised public ledger/database of information which cannot be deleted, leaving a public verified log of every transaction between bitcoin addresses/wallets.

Additions can be made that show the movement of coins between one address another, which is how it is known how much is in each wallet.

Only those with the keys to a wallet can initiate a move of bitcoin between wallets which other machines connected to the blockchain verify with crypto/maths and after so many write to the blockchain to confirm, its written as a done deal.

Its useful because its distributed, a standard, and not modifiable. Banks and services have lots of internal and unique ways of doing things with different charges, especially between banks so the fact this is a standard and cheaper than most other setups is good for them as well as not being editable. Its possible for a banks system to be hacked and a bank balance edited. While there are checks and balances, it can still be done by IT administrators among others. With a blockchain they cannot edit this value. They can only move digits from one place to another, leaving a trail.

For banks it can create standards and lower costs, while also giving them more ways to play with making money, as well as being able to do everything they can already do with it. Not necessarily a good thing where banks are involved.

It can be used as a way to prove ownership of items such as art or even cargo containers. If two copies of an expensive painting turn up, in the future it will be the person who can prove they have ownership of the painting because they still maintain ownership of its certificate on the blockchain.

Movement of shipping and signing off ownership can all be done on a distributed blockchain that all companies can see and build their systems to read the blockchain as a central database.

As to if Bitcoin or CoinX is needed, as well as the different blockchains, over some other standard un-editable shared database.....I don't think we can trust any bank or organisation to come up with a standard without everyone else trying to make their own standard too. Its like asking the media companies to get involved with the nice and easy and cheap standard Netflix them they all deciding there is more profit making their own Disney+, Amazon Prime/whatever streaming service, giving us a fragmented more costly market thats not connected,

[MrReynolds2U]

Since we're moving away from cash, Visa and MC are getting even more powerful.

Sure BritCoin is one option, but they might be better looking at ways of running a parallel payments system within the UK.

China, India and probably a few other countries have their own systems that don't rely upon Visa and MC so we know it's entirely viable.

[NonSSL-Login]

The world desperately needs to get away from the US control of payment systems such as Visa, Paypal etc. Too much control of money under the influence of sometimes just one person/country.

[Flywheel]

I'm surprised

.. that our Government hasn't applied to join the Digital Yuan - it would save a fortune on development costs and would fit in with the current policy of welcoming China with open arms.

[Howard Sway]

Great idea!

Seeing as printer ink is so expensive these days that it will surely soon pass gold as the world's most expensive commodity, the bank notes will soon cost more to print than their nominal value, so it'll be like the time they switched from minting gold coins to using cheaper metals. And the glut of ink caused by the cessation of money printing will drive the price of ink down too! So more cat pics on office walls! If there's enough electricity available to still run the printer after the britcoin mines have been supplied of course.

[IHateWearingATie]

Re: Great idea!

So, am I going to need a new wallet to fit the Canon cartridges in ? Or do I bring a small bottle and pipette to measure it out when paying?

[Roland6]

Re: Great idea!

>Seeing as printer ink is so expensive these days

Only if you buy it from the printer manufacturer prepacked in circa 20ml cartridges - but the same ink in a 25L container...

[Adelio]

Another Stupid Idea.

As said by others. most of these people have NO idea what they are suggesting, how it works, the risks etc.

It would be worthless outside of the UK, no one is going to use it. Probably will contain tech to track us even more closely.

[NonSSL-Login]

I think the only use for it would be similar to the USDT coin or whatever it is which crypto exchanges have more as a coin that reflects the price of the USD, so it can be used as a trading pair or to move your assets out of volatile crypto to a more stable fiat based crypto.

It alllows crypto exchanges that don't deal with any fiat (you cannot put money in or out, only move crypto in and out of the exchange) to have a safe space. Probably more regulation and big sam looking over you if you have real money wallets although i'm not 100% on that.

[Anonymous Coward]

Danger Will Robinson, Danger

Look deep into how china uses their national digital currency. It is tied to the person and their social status. Status is low - not allowed to ride trains, status super high and maybe you are allowed to buy items and travel in the country. You are not allowed to buy items your status doesn't allow. It literally is a slave process. Much better look it up in detail (from peoples perspective and not propaganda) to understand it. It is nothing like BC besides being on a ledger. There are NO purchased not approved by the government.

[Roj Blake]

Re: Danger Will Robinson, Danger

Please don't give Priti Patel any ideas.

[Anonymous Coward]

Even on these threads ...

It seems not many people are aware of the real motivation for a blockchain based currency. Because it goes so much further than mere surveillance.

I can assure anyone reading that the real goal is to create and operate a 2-track economy where the Chumocracy rake in their tokens as being worth 100x the tokens us poor plebs are forced to use.

Imagine a future where your wages worth can be adjusted by the ledger

As I have got older I have also got less and less time for people whose only argument that something can't happen is their own pisspoor imagination.

[Binraider]

Re: Even on these threads ...

Your wages already are adjusted by the ledger; in the form of interest rates and relative progression of your chosen currency with that of other currencies. A lot of people dont understand it, because they are too busy worrying about where the next meal is coming from.

Perhaps I am cynical and old fashioned, but I choose to avoid debt as much as a late stage capitalist society allows, and turn as much as possible into actual assets. You know, stuff that can actually physically be traded and does have a tangible value. Lucky to be in that position. Or did I just work hard to escape the debt trap?

Bitcoin's inherent value is in it's relative anonymity and freedom from transaction charges levied by middlemen. There are other crypto designs that out-perform BTC in this regard; Ethereum 2, Nano being obvious choices.

What does a government backed crypto do that a regular transaction system doesn't already offer? The advantages are negligible and it loses out compared to an independent crypto design.

Marx remains a popular read to this day, and so does Freakonomics. Both could use an update for crypto, but nothing gets away from the growing not-enough-to-go-round while a growing bunch of uber rich cream off the top problem. If they are investing that money back into society it's fine, but while they just sit and accumulate more... The chain breaks.

[MrReynolds2U]

Re: Even on these threads ...

"Bitcoin's inherent value is in it's relative anonymity and freedom from transaction charges levied by middlemen."

Bitcoin isn't free from transaction charges. The scaled charges that seem to have flourished in some places have created a multi-tier system which can cause long delays for low value transactions. But I guess "you get what you pay for."

I agree that there are better alternatives in the coin-market though.

[First Light]

Totally Off Topic - ESL

Isn't there some tech angle the Reg can shoehorn into a piece about the European Super League? I want to read some quality snark about it.

[Korev]

Re: Totally Off Topic - ESL

Did you see that ludicrous display last night?

[Anonymous Coward]

Noone has ever needed a Distributed Ledger for anything, blockchain is a pointless technology. The OECD nations should simply ban all financial institutions from providing services to crypto companies. Considering that it's pretty much impossible to spend crypto without first turning it into cash they would die out immediately and this cult period would be over

[Cynic_999]

It's all about government control

Bitcoin is a distributed, non-centralised system. No government has control of the currency. Its value is determined by the market, and as the rate at which it can be made is limited, a government cannot make itself money at the expense of devaluing it for everyone else by "quantative easing."

But if the BoE were to create a cryptocurrency, you can bet that it will not have a distributed ledger, and the BoE (and therefore the government) will control how much exists and therefore its value, just as it does with the £.

[TRT]

Re: It's all about government control

If it was to be useful for ForeX, though, then in order to maintain trust, the distributed ledger would have to be held across several central banks, say, no? And the software and hardware would need to be specified, surely, as a mark of reliability. I mean, BitCoin is running on all manner of hardware, but does anyone trust it? I mean trust it to the point of national scale finances relying on it? I don't get it still.

[TRT]

Re: It's all about government control

Presumably it will involve taking hard currency out of circulation and issuing it as Britcoin instead.

[Anonymous Coward]

Governments are in love with the idea of unbreakable audit trail with digital currency - it means they can finally collect taxes on all that underground/cash market business that goes on in society. Governments have dreamed of doing so since I was a teenager...

[Gob Smacked]

Stakeholders?

Should that not be "all citizens"? Have you been contacted?

[ShabWeasel]

Shitcoin.....

I'm wondering where the actual value of the 'Britcoin' would be derived from.

Bitcoin has scarcity (as well as being the first successful crypto)

Etherium gains it from allowing traceable ownership of digital goods (more to it than that, I know...).

Maybe they're going to base it on Boris' trustworthiness....... lol

[Anonymous Coward]

Re: Shitcoin.....

Bitcoin actually has value derived from being the reserve currency of crime. If you want to buy drugs or guns you use bitcoin, this necesity of exchange from whatevers to bitcoin drives it's worth.

With countries the value is derived from the need to pay tax. With the British empire this was massive and so the pound has historical weight.

"Bitcoin" will have none of that, so what's the point?

Better would be to push the cost of cash transactions to kill cash in hand tax evasion. A small tax on cash withdrawals would provide that.

[ShabWeasel]

Re: Shitcoin.....

Given the traceability of Bitcoin - the blockchain contains records of all transactions - the criminal uses will likely decline as people become more aware of it's privacy implications (as others have stated regarding the 'Britcoin', provides a lovely data set to the Gov on who's spending what and where)

For 'Britcoin' to exist alongside the pound with value based off taxation/economy, the pound would necessarily have to be devalued in response - after all, both would be fiat currencies with their value would be derived from the same source. There's only so much 'quantitive easing' - whether physical or digital - a currency can withstand before it loses value.

As for cash withdrawal tax, that's a terrible idea that will massively hurt those with lower incomes as well as small traders, pubs, etc.. To make paying with cash more expensive will destroy local markets and others who rely on cash transactions.

[Anonymous Coward]

Re: Shitcoin.....

They're only traceable to "wallets" it's very easy to launder bitcoin. That's the point.

How would you conduct a high value criminal transaction?

[Anonymous Coward]

Re: Shitcoin.....

I think "tax dodging" was missed off the end of your post.

[ShabWeasel]

Re: Shitcoin.....

Tax dodging - easier and less volatile with a good accountant....

As for best way to carry out a criminal transaction, I'd say get a government contract/Boris' phone number.

[NonSSL-Login]

Re: Shitcoin.....

I don't want to put a label on any crypto as being for criminals but Monero/XMR is preferable over bitcoin because of its anonymous nature.

Bitcoin just more well known among the public and easier to buy, which is probably why its used in ransomware etc but I wouldn't be surprised if it gets changed in to XMR, moved around a bit and then even possibly converted back to bitcoin or another coin later.

[Dr_N]

What's in a name?

Can name it in honour of the massive win for British fisher-folk, post brexit:

CodPiece®™

[TRT]

Re: Digital currency?

Oh, I thought you meant *real* money. This is just a bit of loose change. I must have left it in my codpiece when I sent these tights to the laundry.

[Anonymous Coward]

Re: What's in a name?

Not Massivelystupidfuckup?

[Anonymous Coward]

Norks must be happy

[TRT]

Norks?

Titcoin!

[Anonymous Coward]

Re: Norks?

North Koreans. Don't they get a significant % of GDP from bitcoin theft?

[Matthew "The Worst Writer on the Internet" Saroff]

I had an idea for "Britcoin" a while back, and here is how it would work:

It's pre-decimalization, so All transactions must be done in pounds, shillings and pence, so So 5.898958333 BitQuid must be represented as £5 17s 11-3/4 d (5 ₤, 17 shillings, 11 pennies, 1 hapenny, 1 farthing)

It would be pegged to the USD on that day about $2.40 USD to £1 Sterling.

The currency can be subdivided no further than a Farthing.

You would have the BitGuinea/BitYellowboy, BitPound/BitQuid, BitCrown, BitHalf crown, BitFlorin, BitShilling/BitBob, BitSixpence, BitThreepence, BitPenny, BitHalfpenny/BitHa'penny, and BitFarthing.

I could never make up my mind on the BitGroat and the BitQuarterFarthing.

[Anonymous Coward]

I'm sure some would literally creme their kecks over such a proposal. e.g Mark Francois.

[TRT]

As this is a digital coinage system, though, we would surely have 16 bitpennies to the bitshilling, and 16 bitshillings to the bitpound, making 256 bitpennies to the bitpound?

[Anonymous Coward]

Or more simply: name it eSterling and take it full circle back to the routes of why Sterling is called Sterling ...

[TRT]

Not oesterling, then? Or would that be too much like hard work? Maybe that's what the EU digital currency will be called? Makes sense really.

[Slx]

Seems everyone is jumping on this bandwagon. Let's hope the wheels don't fall off.

The ECB and the Fed are also pondering Digital Dollars and Digital Euro.

[Anonymous Coward]

"The Register suggests the Bank of England has moved before it gets left behind"

That's called World Leading in government speak...

[Anonymous Coward]

Priti Patel is already arguing the case for Britcoins to have a backdoor, or three

So she can confiscate them from <the bad guys> whenever she likes.

[Anonymous Coward]

back of a bus...

Some BoE twonk must have have spotted the "If you're seeing bitcoin on the Underground it's time to buy" ads from Luno on the London underground and buses and throught 'what a good idea'

[David Woodhead]

No!

Just no. Really. Please.