Rishi Sunak, the new UK prime minister, has been tipped by many cryptocurrency trade publications to push the UK towards a Central Bank Digital Currency (CBDC) even as new data lays bare the losses incurred by non state backed digital currencies - cryptocurrencies - over the past year.
Publications such as Decrypt, Benzinga, Cointelegraph and Cryptobriefing have all picked up on the points made in the recent past by Sunak on the benefits of developing a digital version of the pound.
Bitcoin Magazine yesterday (24 October) ran a video on its Twitter feed of Sunak making the case.
The G7 put out a set of Public Policy Principles for Retail CBDC in 2021, while the Bank of England has stated that while it has been exploring the possibility, it is yet to make up its mind.
The Bank is keen to stress the CBDC is NOT the same as cryptocurrency.
"A CBDC is different from cryptocurrency (also known as cryptoassets). Cryptocurrencies are not issued by a central bank. These privately issued digital currencies include Bitcoin, Ether (Ethereum) and XRP."
"The value of a cryptoasset can move up and down very quickly. They are a risky investment and anyone buying them should be prepared to lose all their money."
"If we produced a UK central bank digital currency, that would not happen. Our currency would be reliable and retain its value over time."
Events
That distinction may become the deal breaker should the Bank progress to introduce a CBDC.
Analysis from asset trading platform comparison website TradingPlatforms suggests investors in cryptocurrency have suffered a torrid past year.
Citing CoinMarketCap data, it said cryptocurrencies have lost more than $1.9trn in value since the peak of a rally last year. And it is not all about Bitcoin; cryptocurrencies making up 68% of the global crypto market cap have suffered significantly, including on a year-to-date basis:
- Solana -83%
- Polkadot -78%
- Cardano -73%
- Polygon -67%
- Dogecoin -65%
- Ethereum -64%
- Bitcoin -59%
- BNB -47%
- XRP -44%
