##mittances - in - recent - history fsb report on enhancing cross - border payments : https : / / www. fsb. org / wp - content / uploads / p090420 - 2. pdf all speeches are available online at www. bankofengland. co. uk / news / speeches the covid - 19 crisis has accentuated these trends and brought new challenges. the covid - 19 crisis has accelerated these trends. temporary closure of shops and restaurants, or the desire to socially isolate led people to increasingly turn to online shopping. and many shops are encouraging contactless forms of payment over the use of cash. in the uk, data from link, the uk ’ s largest cash machine network, suggests that cash transactions have plummeted. since the uk lockdown began ( 24th of march ), atm cash withdrawals in the uk have dropped by around 60 %. 4 a recent link survey found that 75 % of survey respondents are using less cash than before the crisis. 5 and online sales have taken off, jumping to 30 % of total retail transactions in the uk in april 2020 from just over 18 % a year earlier. 6 to make these stats more real, my parents have for the first time in their lives begun shopping for groceries online. now, i don ’ t know whether my dad ’ s extreme grumpiness about having someone else pick his produce means he ’ ll return to shopping in - person once it ’ s safe for him to do so or whether the convenience of having someone arrive at his door with his groceries will win him over. in time, we ’ ll see how enduring the broader shifts are. indeed, in that same link survey, 76 % of respondents said that the coronavirus crisis will affect their future cash use. internationally, covid - 19 has also exacerbated challenges in sending remittances. 7 and many countries, advanced and developing, has necessitated sharp increases in government to person payments – raising new challenges. 8 4 link : coronavirus crisis means cash use down but uk still withdrawing £1billion from atms each week : https : / / www. link. co. uk / about / news / coronavirus - cash - usage - data / see link article above. ons : internet sales as a percentage of total retail sales : https : / / www. ons. gov. uk / businessindustryandtrade / retailindustry / timeseries /

available online at www. bankofengland. co. uk / news / speeches while same risk, same regulation may seem obvious, in many countries it will require changes to the regulatory framework. where stablecoins are used in place of money, they need to offer the same protections as money. problem 2 is how do you ensure the stability of the “ thing ” being transferred in the payments chain. existing systemic payment arrangements transfer money that is stable and reliable – in bad times and in good. this generally takes two forms : public central bank money - either reserves held at the central bank or cash ; or private commercial bank money – bank deposits. prudential regulation, access to central bank liquidity, and deposit insurance give holders confidence that underpins their willingness to receive commercial bank money as payment. this gives payment recipients – shops and businesses - confidence that when someone taps their card or phone to pay, the amount promised will arrive in their account. international standards explicitly call on payment systems to settle in central bank money when possible and where that ’ s not possible, to settle in commercial bank money and to strictly limit any credit and liquidity risk of the instrument being transferred and settled. however stablecoin arrangements propose to transfer new instruments that they will create themselves – and to settle most of their transactions across their own books. with the right regulation, stablecoins may be safe for use in systemic payments chains. but the protections these stablecoins would offer are currently big question marks. some major stablecoin proposals offer no legal claim for holders. none. this is significantly different from how we currently pay : when my parents pay for their groceries using their debit card, the shop ultimately receives an electronic deposit in the shop ’ s bank account - a promise from the shop ’ s bank to redeem the amount deposited in local currency on demand. when – pre - covid – my parents paid in cash, the shop got banknotes with a central bank promise to “ pay the bearer. ” were they to pay in the future with some proposed stablecoins, the shop would just get a bunch of stablecoins. if the shop can ’ t sell the stablecoin to get local currency or other goods in an amount equivalent to the price of the grocery order, tough luck. additionally many stablecoins propose backing in instruments that may have market and liquidity risk. while these risks might be acceptable for speculative investment purposes, payments are different. this is why the all speeches