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BoE says a 'Britcoin' digital currency would need the same regulation as banks

People walk past the Bank of England in the City of London's financial district
People walk past the Bank of England in the City of London's financial district   -   Copyright  Lefteris Pitarakis/AP2011

The Bank of England said on Monday that payments with "stablecoins" - a form of digital currency pegged to the value of another asset such as fiat money - would need to regulated in the same way as payments currently handled by banks if they become widespread.

The central bank added that it had made no decision yet as to whether it should issue its own central bank digital currency (CBDC) - a prospect dubbed "Britcoin" by finance minister Rishi Sunak when he asked the BoE to look into this in April.

"The prospect of stablecoins as a means of payment and the emerging propositions of CBDC have generated a host of issues that central banks, governments, and society as a whole, need to carefully consider and address," BoE Governor Andrew Bailey said.

"It is essential that we ask the difficult and pertinent questions when it comes to the future of these new forms of digital money," he added.

The BoE published a paper today which aims to "broaden the debate around new forms of digital money and seek views on the Bank’s emerging thoughts on the subject" according to the website.