of bank of england is researching the use of new technologies to enhance both retail and wholesale payment capabilities.

The central bank has focused on establishing a regulatory regime for the use of stablecoins in retail payments, but has also focused on how it can best support innovation in both wholesale payments and financial markets. We are increasingly complementing that effort (including through the modernization of financial institutions' 'Bank of England's wholesale payments infrastructure) and in the Bank's retail payments services. ” Sarah Breedensaid the Bank of England's Deputy Governor on Monday (April 15) on financial stability.

in speech will be delivered in Innovation Finance Global Summit 2024Breeden said the central bank is seeking input from the private sector and plans to publish a discussion paper on these topics over the summer.

In his speech, Breeden said that in the wholesale space, tokenization has the potential to reduce the need for manual reconciliation and long chains of intermediaries, thereby increasing the speed and efficiency of post-trade financial market processes. He said there is.

In early April, with the Bank of England. Financial Conduct Authority Breeden said the (FCA) discussed a digital securities sandbox that would allow the private sector to build real-world trading venues and payment systems using distributed ledger technology (DLT) and other new technologies. Stated. The company plans to begin accepting applications for the financial market infrastructure (FMI) sandbox this summer.

“The sandbox lasted five years, during which time the Bank of England, the FCA and UK Treasury We will learn from the companies' actions and, subject to that, create a new permanent regulatory regime for the trading and settlement of digital securities,'' Breeden said in his speech.

On the retail front, Breeden said the Bank of England is considering whether to issue a retail central bank digital currency (CBDC), which would first ensure “monetary homogeneity”.

When the Bank of England received comments on its 2023 digital pound initiative, many raised concerns about privacy and control over how their money is spent. Mr Breeden said the government aims to guarantee these.

“I would like to emphasize that we have not yet taken a decision on whether or not to issue a digital pound,” Breeden said in his speech. “However, preparatory work is prudent to ensure that issuance options are available if needed.”

The Bank of England and the Treasury published a report in January stating: CBDC They argued that laws would be needed to protect the privacy of CBDC users, rather than to replace cash.

In another recent move, the Bank of England was one of the participants in Project Agora, an initiative by several central banks and governments. bank for international settlements Test tokenization for improvement cross-border payments.

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