The UK prime minister, Rishi Sunak, recently announced a plan to launch a CBDC in the country. This move was deemed as UK’s evil plan by many personalities on Twitter for multiple reasons. And now, just a week later, the UK launches Britcoin, their take on CBDCs. This is a strong move into the future of blockchain and cryptocurrencies, with a cashless society becoming the new norm.
The benefits of the UK’s new digital currency, Britcoin
Britcoin’s primary use case would be to make transactions faster and smoother. It will also eliminate the need for cash or intermediaries like banks. The CBDC transactions will also have many more benefits than traditional banks, making them a better alternative. These benefits are:
1) Low fees
Central Bank Digital Currencies’ transaction fees are much lower than regular bank transactions, making them efficient. It is also a more affordable choice for most people.
2) Backed by authorities
As the name suggests, CBDCs are backed by the government, which means you can trust them to retain their value just like regular fiat currency. However, it also means that it might be subjected to inflation when the government issues new tokens.
Since Britcoin is backed by the government and has a legit use case, it will also see much higher adoption than other cryptocurrencies.
The UK government believes that Britcoin will be necessary for them as a digital version of their fiat currency will be required sooner or later.
Problem with CBDCs
Central Bank Digital Currencies might benefit the authorities and the masses for a while, but it has some significant cons. For example, it will come with privacy issues as the authorities can track and store all user data, which could be vulnerable to attacks. The government can also easily control everyone because, ultimately, it is programmable money. Most importantly, it will become even more accessible for the authorities to increase the supply of money in the market leading to inflation.
What are your thoughts as the UK launches Britcoin, their take on a Central Bank Digital Currency? And do you think this will be widely adopted by the masses? Let us know in the comments below. And, if you found our content informative, share it with our family and friends.