Ross Clark Ross Clark

Don’t fall for Rishi Sunak’s ‘Britcoin’

Do we need an officially-sanctioned, government-backed crypto-currency underwritten by sterling — a ‘Britcoin’ — as Rishi Sunak is said to be advocating? At first sight it is hard to see the attraction. Surely, there are two principle reasons why people feel attracted to Bitcoin and other cryptocurrencies. Firstly, if you are a drug dealer, you might hope that it is a way of keeping your stash of wealth beyond the reach of law enforcers. This hasn’t quite proved true, but you can understand why cryptocurrencies have their fans in the criminal world. Secondly, there is the hope of making a quick, speculative profit. The wildly gyrating values of Bitcoin and other cryptocurrencies make them pretty useless for day-to-day transactions, but it does have the ability to generate quick, massive profits for those who time it right — and corresponding heavy losses for those who get it wrong. This is the real reason cryptocurrencies have generated so much interest in recent years: they are a reinvention of the age-old ponzi scheme.
A Britcoin, on the other hand, would appeal in neither way. It is only going to bob up and down with sterling — and it is difficult to believe that it is going to be designed in such a way as to make it hard for the fraud squad to trace its whereabouts. So just what would be the point of Britcoin? Sunak has been reported as arguing it could make foreign transactions easier and that it could provide a more secure alternative to hoarding cash, for those who don’t want to put their money in a savings account. An increasing number of people appear to fall into this category: since the beginning of the pandemic, the value of Bank of England banknotes in circulation has surged by 14 per cent to £80 billion.

Already a subscriber? Log in

Keep reading with a free trial

Subscribe and get your first month of online and app access for free. After that it’s just £1 a week.

There’s no commitment, you can cancel any time.


Unlock more articles



Don't miss out

Join the conversation with other Spectator readers. Subscribe to leave a comment.

Already a subscriber? Log in