The Bank of England is working with researchers at University College London to design a Bitcoin clone of its own that can be centrally controlled.
A recent MIT Technology report claimed that the UK’s central bank had reached out to university researchers to help it create a cryptographically secure digital currency. The resulting system has now been revealed, and is named RSCoin.
The RSCoin system, developed by Sarah Meiklejohn and George Danezis, employs cryptography to obviate counterfeiting and tampering. Unlike other mechanisms, the digital ledger used by the new cryptocurrency is handled exclusively by a central body. The report explained that RSCoin will only be made accessible to central bank users in possession of a specific encryption key.
Meiklejohn added that eventually third-party institutions (i.e. commercial banks) would be selected by the central bank to join the ledger. She detailed that these collectives would help the central bank process new transactions and submit them for inclusion in the central bank-owned ledger. The developer also noted that RSCoin differs notably from Bitcoin due to its centralised design and ability to handle huge volumes of transactions.