the incumbents ), payments innovation is both a first - tier opportunity ( given the potential benefits for them and their customers of additional payments functionality ) and a first - tier threat ( given the risk of disintermediation by new players ). that in my view demands urgent action. for the bank of england ’ s part, we ’ ll support this both as a regulator by setting out clear expectations [ 26 ], and as a provider of the wholesale infrastructure via which interbank payments ultimately settle. on the latter, we are experimenting with six other central banks, the bank for international settlements and the private sector on ‘ project agora ’, which will explore how tokenised commercial bank deposits could be integrated with tokenised wholesale central bank money to enhance payments efficiency and functionality, including cross - border. to pause for a moment on this international dimension before i conclude, central banks all around the world are facing questions similar to those i ’ ve set out today. projects like agora will help us pool our resources in tackling them. but importantly, they will also help ensure we tackle them in a way that is coherent, helps reduce rather than add to frictions in cross - border payments, and importantly ( and definitely a subject for a speech on another day ) helps us understand the implications for the international monetary system should digital money lead to more frictionless cross - border money holdings and payment flows. conclusion new technologies offer the prospect of enhanced retail and wholesale payments functionality in the uk. our immediate focus at the bank of england following facebook ’ s libra announcement in 2019 has rightly been on establishing regulatory regimes for stablecoins to be used safely for retail payments, and on considering whether a retail cbdc might be needed in future. but we are increasingly complementing that work with a focus on how we can best support innovation both in wholesale payments and financial markets ( including through modernisation of the bank of england ’ s wholesale payments infrastructure ) and in banks ’ retail payments offerings. to do that will require input and close collaboration from the private sector, and so we are planning to set out our thinking in these areas in a discussion paper this summer. [ 29 ] we look forward to harnessing the expertise and creativity of the people in this room as we do so. i would like to thank michael yoganayagam for his assistance in drafting these remarks. i would also like to thank martin arrowsmith, andrew bailey, paul bedford, emma butterworth, diana carrasco vime,

[ 15 ] we take these concerns seriously. in response, the government has committed to introducing primary legislation to parliament before a digital pound could be launched ( and to consult further before doing so ). and that legislation would guarantee users ’ privacy and control of their digital pound payments. let me emphasise – we have not taken any decision on whether or not to issue a digital pound. but preparatory work is prudent to ensure the option to issue is available if needed. our work over the next two years or so will be focused on making a robust and objective assessment of potential benefits and costs, including operational and technical feasibility. to do that, we will consider the potential design of a digital pound in greater detail, informed by technology experimentation and proofs of concept with the private sector. we will continue to engage widely with external stakeholders. and importantly, we will be informed by how innovation in the wider payments landscape evolves. indeed, key inputs into any decision to proceed with a retail cbdc will be the nature and scale of innovation in other forms of retail money ( in particular, commercial bank money ), as well as how our own wholesale payments infrastructure might evolve in support. let me cover both in the rest of this speech, starting with our work supporting innovation in wholesale payments and settlement – an area on which we ’ re increasingly focused. our increased focus on wholesale innovation settlement i spoke earlier about how tokenisation could drive greater speed and efficiency in post - trade financial market processes, through less need for manual reconciliation and long chains of intermediaries. as regulator of financial market infrastructure ( fmi ), we ’ re proactively encouraging firms to explore these technologies. new legislation passed last year gave hm treasury the power to establish so - called ‘ fmi sandboxes ’ – where we modify regulations to allow firms to experiment with new technology. earlier this month, the bank of england and the fca consulted on our approach to the first such sandbox, the digital securities sandbox. [ 16 ] this will enable the private sector to set up real - world trading venues and settlement systems using new technologies such as dlt. we will review feedback to our consultation closely, and plan to open the sandbox to applications this summer. i want to emphasise the ‘ real world ’ aspect, because “ sandbox ” as a moniker probably undersells the innovation we ’ re making as regulators here. these won ’ t merely be prototypes or experiments. our aim is to design the sand