The UK government is exploring plans to introduce 'Britcoin,' a state-backed rival to Bitcoin

FILE PHOTO: Britain's Chancellor of the Exchequer Rishi Sunak reacts as he leaves Downing Street, in London, Britain July 8, 2020. REUTERS/Hannah MckayReuters

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UK government officials are considering launching a new state-backed cryptocurrency, dubbed "Britcoin" by Chancellor Rishi Sunak. 

The move comes after head-spinning few weeks for the industry, in which crypto exchange Coinbase made its $100 billion stock-market debut, while digital currencies like Bitcoin and "shitcoin" counterpart Dogecoin have surged to record highs. 

Speaking ahead of the UK Fintech Week industry conference, Sunak said: "We're launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency."

He added: "The consultation process aims to deliver a rulebook that is fair, outcomes-based and supports competitiveness, whilst ensuring the UK maintains the highest regulatory standards." 

Following word of the new taskforce, a collaboration between the Treasury and the Bank of England, Sunak tweeted one word in in response: "Britcoin?" 

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Britcoin? #UKFW21

According to a recent Bank of International Settlements study, about 80% of central banks, including the Federal Reserve and the European Central Bank, are looking into the potential of launching digital currencies. 

Many among them have put CBDCs (or central bank digital currencies) on their agendas, with about 20% of the 66 central banks saying they're likely to issue a digital currency within the next five to six years, the study shows. 

A number of central banks have flagged the risk of losing control of the global payments system to cryptocurrencies, which are typically not controlled by any central body — or to private entities, such as Facebook's Diem, which is due to launch later this year.

The Bahamas became the first country to launch a general purpose CBDC, known as the Sand Dollar, in October 2020. Meanwhile, the People's Bank of China expanded a trial of a digital renminbi to its three largest urban regions, which together contain 400 million people, last August.

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