digital money, how will it change things and is it needed? we tend to think about money in two ways at least : its uses and its forms. the uses are store of value, means of payment, unit of account. on the forms, we use the terms inside and outside money and commercial bank money and central bank money1. ( gurley and shaw 1960 ; friedman and schwartz 1963 ). in this language, commercial bank money is inside money, and central bank money is outside money. we regulate banks in good part because money is a public good. inside or commercial bank money is now the dominant type of money, and that supports the provision of credit in economies. now, onto this scene lands crypto and digital money. note, i did not describe crypto – in its unbacked form – as money. it isn't. for money to fulfil its function as a means of 2 / 6 bis - central bankers'speeches payment it requires stability of value. this is clearly not true of unbacked crypto. it could be a bet, a highly speculative investment or a collectible, but note that it has no intrinsic value, so buyer be very aware. more interesting is the creation of so - called'stable coins'or digital currency, which purport at least to be money as a means of payment. but, as we have seen, they do not have assured value, and in the work we have done at the bank of england we have concluded that the public should expect assured value in digital money, and confidence in this is needed to underpin financial stability. for stable coins to function as money they will need to have the characteristics of, and be regulated as, inside money. meanwhile, a lot of work is going on to assess the future of digital money, including central bank digital currency ( cbdc ). digital money is not new. digital money in the form of commercial bank deposits and commercial bank reserves at the central bank have existed for many decades. what is new is the idea of broadly available retail digital money. but, this evolution of digital money is about the technology of delivery ; it has not ripped up the script of inside and outside money. the question for us all should therefore focus most on is whether we think there will be a demand for retail digital money in the future? and, here we should not suffer a failure of imagination. if we think the demand will exist, what form should it take? i

net worth customers, and 66 sub - funds, with a total net asset value of lm1. 22 billion. the number of local collective investment schemes ( ciss ) stands at 14, with 52 sub - funds, and shareholders ’ funds total over lm0. 5 billion. the insurance sector has also been growing rapidly of late, with four new licences being issued during the first half of 2006. to date, there are 33 insurance principals registered in malta, 16 of them are foreign companies offering their services through insurance agents. passporting rights have been well availed of in this sector, too, and the total number of notifications for european insurance undertakings to carry on business in malta under the freedom to provide services directive now stands at 204. the other reflection i would like to share with you is inspired by an interview given recently by the ceo of mediterranean bank to a local economic magazine, in which malta was referred to as ‘ a secure eu jurisdiction ’. in this same context it was stated that ‘ malta ’ s stability is an important part of its appeal as a banking location ’. while such accolades are indeed welcome, they do not come entirely as a surprise. for when malta ’ s financial legislation was overhauled in 1994, and when eu legislation was later transposed in anticipation of eu membership, an intended by - product was indeed the incorporation of the highest international standards and best practices into maltese financial laws and regulations. this was accompanied by a strengthening of the institutional framework for the regulation and oversight of the financial system. in 2002 the malta financial services authority ( mfsa ) became the single regulator for financial services when it took over the responsibility for the banking sector from the central bank of malta ( cbm ). the bank then assumed responsibility for ensuring the stability of the entire financial system. a year later malta volunteered to undergo a financial sector assessment programme ( fsap ) by the imf and the world bank. after a thorough examination by a team of international experts, our financial system was certified as being healthy, well supervised in the context of a comprehensive legal framework, and strongly compliant with most of the relevant international standards and codes. we cannot, of course, afford to be complacent. a good reputation takes time and considerable effort to earn, but can easily be lost. it is the joint responsibility of the cbm and the mfsa, the credit institutions and the other financial service providers, and of all market participants, including the financial lawyers