While the focus of debate so far has been on the costs of this disruption, largely in the form of disintermediation of existing agents, there are significant potential benefits to be had too. Specifically, this could lead to a closer alignment of risk for those institutions, new and old, offering these services - narrow banking for payments (money backed by safe assets) and limited purpose banking for lending (risky assets backed by risky liabilities). This radically different topology, while not costless, would reduce at source the fragilities in the banking model that have been causing financial crises for over 800 years. Given the costs of those crises – large and rising – this is a benefit that needs to be weighed. On monetary policy, the most important constraint facing policymakers today is the (close to) zero lower bound (ZLB) on interest rates. At root, the ZLB arises from a technological constraint – the inability to pay or receive interest on physical cash. This is a technological constraint that every form of money, other than  28  For more information on the work the Bank of England is doing, see two discussion papers here and here. Haldane (2007). 30 Bank of England (2021) 29  17  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  17  cash, has long since side-stepped.

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