Bank of England Discussion Paper on New Forms of Digital Money
Industry News | 08/06/21
The Bank of England published a Discussion Paper which aims to broaden the debate around new forms of digital money and seek views on the Bank’s emerging thoughts on the subject.
The Discussion Paper considers a number of issues:
- The role of money in the economy: The paper looks at existing forms of money and their uses. It also considers how any move towards new forms of digital money could impact the financial system and wider economy through the lens of money and credit creation.
- Fundamental questions across a range of public policy objectives: The paper highlights the Bank’s close work with other UK and international authorities to understand the challenges and opportunities presented by systemic stablecoins.
- An illustrative scenario for the demand for new forms of digital money modelled by Bank staff.
- The implications for macroeconomic stability: The paper has five issues arising from new forms of digital money that can create both a number of opportunities and risks for economic stability. These include: public confidence in money and payments and in the financial system as a whole; banking sector liquidity resilience; credit conditions; money market functioning, and the implementation and transmission of monetary policy.
- The regulatory environment.
The paper is open for discussion for three months. The deadline for comments is 7th September 2021.