New prospects for money – speech by Andrew Bailey
I don’t think we should be using enhanced digitalisation materially to shift the mix of commercial bank and central bank retail money towards the latter. Commercial banks support credit creation and lending in the economy, and I do not wish to see this impaired. We want to encourage more thinking and action in the world of enhanced digital bank deposits – sometimes call tokenised deposits. So, yes, this is a call to action particularly to banks – don’t leave central banks as the only show in town. That’s not what we want. We may still think it is helpful to create retail central bank digital currency as an anchor for the singleness of digital money, which is why we are going ahead with our investigative work. We want to be able to have a genuine choice.
We may also get proposals to create digital money in the form of stablecoins, which could be issued by banks or non-banks. We will shortly set out proposals for regulating systemic stablecoins, under powers contained in the Financial Services and Markets Act 2023. Such stablecoins will have to meet the tests of singleness of money and settlement finality.
The full speech is available at https://www.bankofengland.co.uk/speech/2023/july/andrew-bailey-speech-at-the-financial-and-professional-services-dinner