Chancellor Rishi Sunak is pushing to introduce a new digital currency, according to reports. 

Penned 'Britcoin', the plans would result in the biggest alterations to the monetary system in centuries, getting rid of physical money and instead replacing it with a digital alternative. 

A taskforce investigating the proposal is expected to report back to the chancellor by the end of the year. 

In the meantime, here's everything you need to know about the so-called 'Britcoin'...

What is Britcoin?

You may have heard of Bitcoin, but what about Britcoin?

Well, the similarities don't end at the name, with both founded on the same idea: digital currency. 

The term digital currency refers to payments that are made entirely electronically.

If the Britcoin plans went ahead, physical money would be replaced with digital currency. 

Chancellor Rishi Sunak is reportedly looking into the prospects of using digital currency in the future, and has set up a taskforce of officials from Bank of England and the Treasury to look into the proposal. 

However, unlike other digital currencies Britcoin would supposedly be directly linked with the pound Sterling and the Bank of England, meaning the value would not swing in the same way other cryptocurrencies do. 

What are the perceived pros and cons of the Britcoin proposal?

According to reports, the proposal has been met with a mixed reception amongst officials in the treasury. 

Some believe the introduction of Britcoin would help during financial crises, by allowing the Bank of England to give the economy a boost by paying Britcoins straight into customers' accounts. 

It means that the bank could pay 'helicopter' money into people's accounts.

This is a way of jumpstarting a failing economy by rapidly increasing money supply through methods such as tax cuts. 

Supporters also claim Britcoin could make bank transfers and online banking quicker as well as cutting banking costs for small firms. 

However, critics say the plans could cause greater financial instability by making it more difficult for banks to introduce regulatory measures like setting interest rates.

Other concerns include fears that high numbers of people switching to Britcoin at once would reduce the amount of money high street banks have available to lend resulting in higher mortgage and loan rates.

Have other countries got digital currencies?

Other countries are also seemingly buying into digital currencies. 

China and the US are both supposedly considering introducing digital currencies, while a digital euro also has potential. 

However, no country has formerly introduced a digital currency as of yet.