BoE speaks on modernising money

Sarah Breedon has spoken at City Week on the BoE’s vision of the future of UK finance. She focused on how responsible adoption of tokenisation can be good for financial stability and will support sustainable growth in retail payments and financial markets. She spoke of:

• shared ledgers making payment and settlement faster and cheaper;
• smart contracts allowing for greater customisation, conditionality and automation; and
• atomic swaps to extend DvP and PvP settlement to a wider range of retail and wholesale use cases.

She said the option for another payment method will have advantages both nationally and internationally, and said the PRA will be pushing for banks to adopt new technologies in the money they issue. Banking groups can also issue stablecoins provided it is from a non-deposit-taking, insolvency-remote group entity – subject to certain requirements and controls. And it is also looking at trading and settlement of tokenised assets alongside their prudential treatment. It is committed to supporting the UK DIGIT and is working on synchronisation in central bank money settlement. But she also stressed the importance of robust, privately issued money that will likely play an ongoing role in tokenised markets.