scale, chart 1 compares two stylised benchmarks – the stock of banknotes ; and 20 % of retail commercial bank deposits2 – to the size of central bank balance sheets between the period before the global financial crisis and today. in the uk, the upper end of that benchmark range is nearly half the size of the bank of england ’ s balance sheet today, and six times that in 2007. this is the assumption used in the illustrative scenario in section 3 of the bank ’ s 2021 discussion paper new forms of digital money | bank of england, and reflects the share of uk deposits that is non interest bearing. bank of england sources : individual central banks ’ published data, imf, bank calculations. those are big numbers. but they aren ’ t unprecedented in the history of central banking. in the uk, even the top end of the range in chart 1 would still leave the stock of publicly - provided means of payment at around the levels seen in the mid - 20th century ( chart 2 ). this underscores the point that, while the technology for any future cbdc may be new, the use of the central bank balance sheet to provide state - backed transactional money would not be : indeed, it is one of the oldest functions of central banks. bank of england sources : bank of england, imf. 2. stablecoins that are truly stable may have much the same impact as public authorities reflect on the case for cbdcs, private sector providers have been developing so - called ‘ stablecoins ’, which claim to be pegged to the value of fiat currencies. i say ‘ claim ’, because recent weeks have suggested such promises may be less than fully credible. the value of terrausd – once one of the larger ‘ stablecoins ’ by market capitalisation – fell to zero in just a few days. and tether, sometimes asserted to be the backbone of the cryptocurrency ecosystem, lurched precariously below parity for a period ( chart 3 ). these gyrations have multiple causes. but ‘ stable ’ they are not. and the lack of complete, real time, information on the assets backing the promise of convertibility, 3 means that holders of such coins must accept at least the possibility of finding themselves badly out of pocket. such ‘ buyer beware ’ warnings may be sufficient for coins that are only in niche use. but they cannot be enough for any that reach systemic scale.

greater trade, investment and innovation. this high road leads to more jobs, higher sustainable growth, and better risk management across the g20. but there is another path – the low road – where trust and cooperation diminish, fragmentation hardens, capital flows are disrupted, and trade and innovation are curtailed. if authorities do not have sufficient confidence that their efforts to promote financial stability are being reciprocated elsewhere, then concerns about the risks of openness to domestic financial stability could intensify. if they do, domestic authorities will act to safeguard their primary responsibilities. all speeches are available online at www. bankofengland. co. uk / speeches without cooperation, host authorities may become more inclined to impose local requirements on domestic entities, to insulate domestic stability in cases where there is no support from the group or coordination amongst authorities in responding to distress. in a world where many banks and fmis are highly interconnected both financially and operationally that would generate significant inefficiencies, frustrating the benefits that flow from open international trade and investment. taking the low road would be a sub - optimal for all, with fewer jobs, lower growth and higher domestic risks. vi. the path taken by brexit how the brexit negotiations conclude will be a litmus test for responsible financial globalisation. we start from a position where the high road is both readily attainable and highly desirable for all involved. the uk and the rest of the eu have exactly the same rules governing our systems. and we have the most highly developed frameworks for intensive supervisory cooperation. capital flows seamlessly across our borders. the current eu legal regime allows firms to passport throughout the union, supervised by the home supervisor. the eu and uk are therefore ideally positioned to create an effective system of deference to each other ’ s comparable regulatory outcomes, supported by commitments to common minimum standards and open supervisory co - operation. these commitments could be reinforced by reliance on independent peer reviews and a new, independent dispute resolution mechanism. such an outcome would be entirely consistent with the uk government ’ s stated aim of a new, comprehensive, bold and ambitious free trade relationship with the eu that embraces goods, services and network industries. and such an approach could be applied more broadly to the immense benefit of the global economy. the uk and eu have the potential to create the template for trade in financial services – one that leverages the tremendous progress that has been made in recent years building resilience and cooperation