Today the Bank of England published a discussion paper on innovation in money and payments. While it covers payments across the board, it aims to gather feedback for planned wholesale central bank money trials. This will include both a wholesale central bank digital currency (wCBDC) and a synchronization solution enabling DLT transactions to settle using the real time gross settlement (RTGS) system.
There are several drivers behind this move. One of the Bank’s concerns is the potential future use of stablecoins in the wholesale market, which hasn’t happened so far. The report states, “We judge that these risks are an order of magnitude greater than the risks posed by retail use cases.”
At a retail level, the UK is now testing tokenized deposits through the Regulated Liability Network initiative. However, the paper warns of the need for progress. “Commercial bank money needs to keep pace with the needs of consumers and so carry functionalities to deliver safe and sustainable innovation in payments,” wrote the authors. “Absent such innovation, central banks may be left as the only game in town insofar as retail payments innovation is concerned.”
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
