Bank of England plans its own cryptocurrency as Bitcoin price soars to a record high
Bitcoin prices soared to a record high as the Bank of England laid out a timetable for the launch of its own cryptocurrency.
The coin broke through $68,000 (£50,150) for the first time, meaning it is now up over 110 per cent since the start of the year. Its previous record was in late October, when it hit $67,700 (£49,920).
Sentiment was helped by Apple boss Tim Cook who said he owned some crypto- currency, adding that he had been interested in the asset class ‘for a while’.
Cryptoboom: Bitcoin broke through $68,000 (£50,150) for the first time, meaning it is now up over 110 per cent since the start of the year
It makes it the best performing asset year to date, according to Bank of America, with analysts speculating that investors are increasingly using bitcoin as a hedge against inflation.
JP Morgan said in a note: ‘We believe the perception of bitcoin as a better-in-inflation hedge than gold is the main reason for the current upswing.’
Last week the Bank of England warned that inflation was set to peak at 5 per cent early next year, while prices are also running hot in the US.
And in an update yesterday, the Bank said it would launch a consultation on the introduction of a so-called central bank digital currency (CBDC) next year.
Dubbed ‘Britcoin’, the Bank and the Treasury cooled expectations by saying it would take until at least 2025 for the currency to be launched in the UK.
Bitcoin has been the best performing asset year to date, according to Bank of America, with analysts speculating that investors are increasingly using bitcoin as a hedge against inflation
‘The earliest date for launch of a UK CBDC would be in the second half of the decade,’ they said. It is a ‘major national infrastructure project’, officials said, designed to exist alongside cash and bank deposits, rather than replacing them.
The Bank’s deputy governor for financial stability, Jon Cunliffe said: ‘The plan to publish a consultation next year on CBDC is a crucial step in our policy development, especially as we further our thinking on the pressing issues at hand.
‘What it will do is provide a platform for interested parties and relevant groups to engage with the key questions on the merits of CBDC, and whether the public sector should advance to a development phase.’
John Glen MP, the Economic Secretary to the Treasury, said yesterday: ‘This consultation will begin an open discussion on the role a UK central bank digital currency might play in the UK.
‘I’d encourage everyone to contribute to the discussion so we can explore the opportunities this could bring, as well as understanding any risks it may pose.’