##ilient, alternative payment rail it could reinforce the overall resilience of the uk payments system. these motivations are explored more fully in the paper we have published today. the model for a digital pound our assessment, therefore is that on current trends a digital pound would have benefits and is likely to be needed. however, the taskforce concluded, that we are not at present at a point at which a firm decision could be taken to implement the digital pound. further work, especially detailed technical exploration and development is necessary to assess the feasibility and cost of what would be a very major public, financial infrastructure project. we expect this intensive exploration and technical development phase to take around three years. it will produce a technical blueprint for the digital pound. the work will not delay but rather shorten the lead time to actual launch should a firm decision be taken in the future to implement the digital pound so that a digital pound could be introduced in the second half of the decade. and during this next phase, we will be able to see more evidence of how the current trends and changes in payments and money are playing out which will help to inform a future decision. in order to proceed to the next phase we need clarity about the model of the digital pound we wish to develop. we have today set out that model in detail for consultation. we are seeking industry and public views on the key design choices that determine the model. the consultation paper is accompanied by a technical working paper which sets out our current thinking on the relevant technology and seeks feedback on the approaches we propose to consider. there is not time today to go through the model in detail, but i will briefly set out some of the most important details of what we propose. we envisage the digital pound as a partnership with the private sector. the bank would provide the digital pound and the central infrastructure, including the ‘ core ledger ’. private sector firms – which could be banks or approved non - bank firms – would provide the interface between the bank ’ s central infrastructure and users by offering wallets and payment services. these private companies would be able to integrate the digital pound, as the settlement asset, into the services they would offer to wallet holders. the wallets would be operated on a ‘ pass - through ’ basis. that is to say, they would not constitute a claim on the wallet provider in the way that a bank account is a claim on a bank. nor would they represent a custody arrangement. rather, the wallets would

economic stability. the forms that money takes and the ways it is used have changed throughout history driven by changes in technology and the changing demands of ever more sophisticated and complex economies. however, trust in money is the bedrock on which that innovation is built. two forms of money are currently available to the public [ 2 ] throughout the uk. the bank of england and the royal mint issue a physical form of money to the public – bank notes and coins, otherwise known as ‘ cash ’. private commercial banks issue predominantly digital money in the form of electronic transfers between bank deposit accounts [ 3 ]. we have seen major changes in recent years in the form of use of money to make payments. in the mid - 1960s, most workers were paid weekly in cash, and around 70 % of the population did not have a bank account. [ 4 ] very few had access to credit or debit cards. consequently, for every £100 of funds that people held to make payments, over a third would be held as cash. nowadays, less than 5 % is held as cash. even 15 years ago, 60 % of transactions in the uk used physical cash ; pretty much everyone in this room would have carried enough for everyday transactions. in 2021 only 15 % of transactions involved physical money. technology and the increasing digitalisation of everyday life has transformed the way we use money. private commercial bank money accounted for 85 % of the payments made by the public. within that, debit and credit card transactions accounted for 69 % of transactions. contactless payment has made such transactions much easier for everyday life. and the growth of internet commerce has required the use of digital money. it is always challenging to forecast how technological advances and social trends will play out. few at the turn of this century would have predicted the development and growth of a massive and dominant market and social platforms. or how the advances in the functionality of the smartphone, as most recently seen during the pandemic, would transform daily lives. but while we cannot know with certainty how current trends in payments and technology will play out, it would be complacent to assume that developments in money and payments will end with the status quo. there are already in existence new digital technologies that are being applied to the digital representation, transfer and storing of money like obligations. these offer the prospect of new possibilities in the way money and payments can be configured to interact with digital processes. programmable money, for example, could enable the development of smart contracts which carry out