Yesterday, HM Treasury announced the appointment of Sarah Breeden as Deputy Governor for Financial Stability at the Bank of England (BoE). She will replace Sir Jon Cunliffe, a seasoned central bank digital currency (CBDC) expert who has held the post for the past ten years, the maximum term a Deputy Governor may serve. In November Ms. Breeden will assume her responsibilities, including oversight of the digital pound.
The new Deputy Governor
In her new role, Ms. Breeden will play a key role in ensuring the stability of the UK’s financial sector and represent the BoE on several national and international bodies.
She will also oversee the unit responsible for CBDC and FinTech. And beyond CBDC, as private regulated digital currencies and DLT-based settlement networks such as Fnality emerge, her role as Chair of the Financial Market Infrastructure Board is one that will impact the DLT and digital assets sectors.
Ms. Breeden began working at the BoE in 1991. Over the years, she has held various posts related to market operations, risk management, and banking supervision. She currently serves as Executive Director of Financial Stability Strategy and Risk, directly reporting to Mr. Cunliffe, and sits on the Financial Policy Committee, the United Kingdom’s macroprudential authority.
Cunliffe’s CBDC experience
In her new role, Ms. Breeden will have big shoes to fill. Sir Jon Cunliffe has been one of the most thoughtful and articulate central bankers when it comes to CBDC and DLT.
In March, he said the “Britcoin” was more likely than not, arguing it would be complacent to assume that digital payments are not here to stay. He noted a forward-looking assessment is essential and that a digital pound could bring huge benefits to the economy and society, including micropayments, automated delivery systems, and programmable money.
However, the BoE has not made an official launch decision yet. Its February consultation paper attracted feedback from leading trade associations, such as UK Finance and the International Regulatory Strategy Group (IRSG), which noted concerns about the risks to financial stability.
However, Sir Jon Cunliffe has also warned of the risks of cryptocurrencies. In 2022, he supported the need for legislation in view of the collapse of FTX, a digital currency exchange platform that fell due to the mishandling of its CEO Sam Bankman Fried. The year before, he emphasized the potential impact that a massive drop in the price of bitcoin or other crypto-assets might have on the broader financial system should the linkage with traditional finance (TradFi) expand..