‘Britcoin’ not bitcoin? UK considers new digital currency

British finance minister Rishi Sunak told the Bank of England on Monday to look at the case for a new “Britcoin”, or central bank-backed digital currency, aimed at tackling some of the challenges posed by cryptocurrencies such as bitcoin.

Britain is the latest country to join a global race toward central bank digital currencies.

“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,” U.K. Finance Minister Rishi Sunak said at a fintech industry conference on Monday.

In a separate statement, the Bank of England said such a currency would be a “new form of digital money issued by the Bank of England and for use by households and businesses” that exists alongside cash and bank deposits rather than replacing them.

The U.K. government hasn’t yet decided whether to introduce a digital version of the British pound, but said it would explore the “objectives, use cases, opportunities and risks” involved if it were to proceed. The Bank of England will also set up a unit within the institution dedicated to exploring a central bank digital currency.

It comes as several central banks race to figure out their own strategies for central bank digital currencies, or CBDCs. The rise of bitcoin and other cryptocurrencies has given new impetus to such initiatives, as well as the broader trend of declining cash usage.

Bitcoin surged to a record high of $64,829 last week ahead of the highly-anticipated debut from cryptocurrency exchange Coinbase. But the world’s most popular digital coin sank sharply over the weekend due to fears around regulation.

A spike in the value of meme-inspired token dogecoin, meanwhile, has led to concerns of a potential bubble in the cryptocurrency market. As of Monday, bitcoin was trading at about $56,740, up 3% in the last 24 hours.