across the products labelled as stablecoins. 10. see for example the libra white paper and related diem technical papers 11. as set out in the regulatory initiatives grid.. 12. press release : cpmi and iosco publish final guidance on stablecoin arrangements confirming application of principles for financial market infrastructures ( bis. org ) 13. specifically the stablecoin should be convertible into other liquid assets, as soon as possible, at a minimum by the end of the day and ideally intraday, in line with key consideration 5 of the pfmi. 14. financial stability in focus ( bankofengland. co. uk ) 15. see in particular section 4. 6 of new forms of digital money | bank of england. 16. see for example the development of jpm coin and onyx, or the action of a consortium of banks and fmis in founding fnality. 17. prominent examples include the regulated liabilities network and the usdf consortium. 18. this was set out in particular in the furman review - unlocking digital competition, report of the digital competition expert panel - gov. uk ( www. gov. uk ) 19. innovation in post trade services - opportunities, risks and the role for the public sector − speech by sir jon cunliffe | bank of england. 20. bank of england publishes policy for omnibus accounts in rtgs | bank of england 21. for example, fnality, which was recognised late last year as a regulated payment system. 22. the bank consulted on the future roadmap for the rtgs system in spring 2022. earlier this year we issued a response to that consultation setting out that we will prioritise features supporting innovation and global initiatives, which include synchronised settlement, extended operating hours and non - payment apis. sir jon cunliffe deputy governor, financial stability ©2023 bank of england

of confusion on the part of customers as to protections they are entitled to and confusion of business models within the bank itself. there are i think strong arguments to keep these two models separate and require banks that wish to issue payment stablecoins under the new regulatory regime to do so through legally remote and otherwise distinct entities. i want to turn now to the third potential development : the issue of a central bank digital currency either for retail or for wholesale purposes. as many here may know, the bank and hm treasury published a consultation paper in february on the digital pound – a sterling digital currency that would be issued by the bank of england for general purpose retail use. no decision has been taken to implement the digital pound but the bank and treasury ’ s assessment is that it is likely to be needed if current trends in payments and money – some of which i have been discussing – continue. this assessment rests on two main considerations. the first is the need to anchor the value and robustness of all monies circulating in the uk. physical cash issued by the bank plays an anchoring role at present in a world in which only commercial banks issue private money. if future trends continue, cash use is likely decline further and cash itself will become less is useable in all everyday transactions, for example if internet commerce grows and if merchants increasingly accept only digital payment. at the same time, new, non - bank players are likely to enter the scene, issuing private money, such as stablecoins, for payment purposes. in such a world the right of the holder and the obligation of the issuer to be able to convert all private money into bank of england digital money at par and on demand would secure the anchor currently provided by cash. the second consideration is to ensure that there can be competition and innovation in the development of new functionalities using tokenised money. given the network externalities around money and the likely cost of developing robust and risk managed private tokenised money like stablecoins, it is possible that the development of digital settlement assets will converge on a few large players who will dominate and perhaps control innovation in payment services. we have seen a similar dynamic in the emergence of large internet platforms and marketplaces [ 18 ]. the bank and treasury consultation paper proposes a ‘ platform ’ model of the digital pound in which the bank would provide the digital settlement and central transfer mechanism and the private sector would provide the wallets and consumer facing payment services. the digital pound would therefore be available to a wide variety of