The so-called Britcoin Central Bank Digital Currency (CBDC) has been met with a resounding ‘no’ by the British public, new research has revealed.
A survey of 2,500 UK residents carried out for Politico, the global political news organisation, found many people were more suspicious of CBDCs than excited.
The Bank of England has been consulting on a Government-backed cryptocurrency and has set up a task force to examine the possibility of launching a digital pound, or Britcoin.
A CBDC differs from a traditional cryptocurrency, such as Bitcoin or Ethereum, in that it is effectively a stablecoin and pegged to a currency.
The Britcoin would be pegged to the pound and backed by the treasury. This means it wouldn’t suffer from the price fluctuations associated with Bitcoin and other cryptocurrencies.
The survey, conducted by Redfield & Wilton Strategies, found just 24 percent of respondents felt a digital pound would bring more benefits than harm, with 30 percent holding an opposing view.
Other findings include:
- 73 percent were reluctant to hold Britcoins due to the threat of cyberattacks and hackers.
- 70 percent worried about a loss of privacy with their financial affairs.
- 62 percent feared the authorities would be able to seize the funds in their wallets.
- 45 percent expressed concerns about the environmental impact of a digital pound.
Support for Bitcoin and decentralised cryptocurrencies grows
Interestingly, some 40 percent of people who responded said they were in favour of legislation that would allow digital coins such as Bitcoin to operate in the UK.
The survey also highlighted a growing understanding of how cryptocurrencies work, with 54% confident in their knowledge of digital currencies.
Some 16% said they had used crypto to pay for goods and services, and 31% said they were likely to own crypto over the coming year.
Inflation-busting returns were the main reason cited for owning crypto (37%), with 32% saying they felt it was a store of value and 23% holding Bitcoin to avoid Government legislation.
The majority of those who did not yet own crypto (64%) said it’s because they didn’t have enough knowledge about the currency, but 47% would be willing to take free training if it were available online.
Some 23% of people who didn’t own crypto cited its complexity as the reason, strengthening the need for education in the sector.
PayPal offers education with new UK crypto offering
Payments giant PayPal is already making inroads into increasing consumer understanding of crypto after announcing that its UK clients can now buy, sell and store Bitcoin, Ethereum, Litecoin and Bitcoin Cash on its platform.
As part of the move, the company is providing educational content aimed at those who have never used digital currencies before.
How would the Britcoin work?
The Britcoin would operate in the same way as other cryptocurrencies, but would be administered by the Bank of England and UK Government.
Other countries around the world are working on similar initiatives, including China which is trialling a digital Yuan.
One of the major stumbling blocks of any CBDC is trust. While Bitcoin and other cryptocurrencies are completely decentralised and beyond the control of governments, CBDCs are not.
Some of the advantages of a Britcoin are:
- A cheaper and faster way to pay for goods and services.
- Giving people without bank accounts access to an easy and secure payment method.
- A stable price to compared to Bitcoin and other digital currencies.
The disadvantages include:
- Increased power handed to Government’s to control people’s finances.
- Administered by one entity which could block accounts and access to your funds.
- Restricted to the country of issuance, rather than globally traded such as Bitcoin.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).