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. And that is why the Bank of England’s Financial Policy Committee has recommended that, in the UK, any stablecoin that reaches systemic size should also meet standards equivalent to those  See eg Crypto industry shaken as Tether’s dollar peg snaps | Financial Times (ft.com); ‘We’re Not Revealing Our Secret Recipe’, Tether’s CTO Says (bloomberglinea.com); and Whereabouts of Terra’s Bitcoin Reserve a Mystery After Transfers - Bloomberg 3  Bank of England  Page 6  expected of commercial bank money.4 In practice that is likely to mean being issued by a bank, or by a non-bank that: is subject to rigorous central bank regulation and supervision;5 provides coinholders with a robust legal claim; is insolvency remote; and transparently backs its coins with a precisely defined set of high quality and liquid assets. Source: Bloomberg Finance L.P. Digital Asset Research, Inc.  It’s too soon to say what those assets should be.
How much should tomorrow’s central bank balance sheets do - speech by Andrew Hauser | Bank of England  Bank of England  Page 12  bank balance sheet to provide state-backed transactional money is one of our most longstanding functions. The dog may be old, but it can still perform new tricks! I am very grateful to Joshua Jones and India Rimmer for their assistance in preparing these remarks; and to Andrew Bailey, Sarah Breeden, Shiv Chowla, Rohan Churm, Jon Cunliffe, Rafael Kinston, Jeremy Leake, Amber McAlone, Ali Moussavi, Huw Pill, Dave Ramsden, Francine Robb, Christina Segal-Knowles and Cormac Sullivan for their advice and comments.