The UK will explore a Bank of England-backed cryptocurrency called 'Britcoin'

• British finance minister Rishi Sunak revealed the UK is exploring the feasibility of "britcoin," Reuters reported.
• It is a cryptocurrency backed by the Bank of England aimed to address the issues bitcoin has.
• A new task force was launched on Monday to look into a central bank digital currency or CBDC.

British finance minister Rishi Sunak on Monday revealed that he is exploring the feasibility of a cryptocurrency backed by the Bank of England dubbed "britcoin," aimed addressing some of the issues posed by other cryptocurrencies.

"We're launching a new task force between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency (CBDC)," Sunak said during the UK FinTech Week conference, as reported by Reuters.

Shortly after the announcement, Sunak published to his nearly 500,000 followers a one-word tweet saying: "Britcoin?"

The new task force will explore opportunities and risks of a CBDC, as well as monitor international CBDC developments to "ensure the UK remains at the forefront of global innovation."

"The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK and will engage widely with stakeholders on the benefits, risks, and practicalities of doing so," the BoE said in a statement Monday.

But, if plans go through, the CBDC will exist alongside cash and bank deposits instead of replacing them, the bank said.

Other central banks across the world are examining the possibility of a digital currency, with China leading the pack. The Asian superpower is already at the point of extensive pilot testing, according to a new Citi report this month entitled Future of Money.

China began developing its digital currency electronic payment CBDC in 2014 and tested a pilot in 2020. Citi said it expects China's "sprint to a cashless society" within five years.

BoE Governor Andrew Bailey in the past has said that he sees little intrinsic value in bitcoin doubts its utility as a form of payment. Bailey shares this sentiment with US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde.

Still, bitcoin has skyrocketed 600% in the last 12 months. The market value of cryptocurrencies as a whole hit $2 trillion in April, doubling in value in a matter of months.