As operators of public infrastructure, we have a similar role to play for payment systems. We build infrastructure, add new functionality and set standards and policies to underpin safe and efficient economic and social activity. To do so effectively, we need to listen to and collaborate with the whole industry: ensuring that public and private sector innovation is coordinated. Infrastructure is only valuable if sufficient users can access it. As a public authority, we want to encourage fair and open competition with proportionate barriers to entry. A road is only useful if a wide range of people and vehicles can drive on it. Overly restrictive access policies can be a barrier to innovation, increase tiering and lead to more expensive services for end-users. Just as we need some restrictions on roads, such as preventing heavy vehicles from using weak bridges, and ensuring vehicles have passed appropriate tests, appropriate safeguards are needed in the access criteria for payment systems. There are two key ways to make central bank money more accessible while managing risk. The first is enhancing the access policy, including clear criteria . In 2017, the Bank of England opened direct access to settlement accounts to non-bank Payment Service ProvidersOpens in a new window – half a dozen or so have already joined. In 2021, we launched an omnibus account policy offering to innovative high-value payment services, underpinned by the security of central bank money. Omnibus accounts can enable market participants to develop new payment systems, or allow existing systems to settle more securely.
How payment services and user needs are evolving Technology continues to transform retail payments: the way we pay for goods and services has changed dramatically over the past decade or so. In many countries, you can now pay for your tea and cake with a smartwatch, or send your friends a ‘payment request’ with a few taps to split a bill at a restaurant. Many people’s wallets are now virtual rather than physical. Innovation has expanded the frontier of what is possible and provided many of us with access to faster and simpler payment services. It is not just the private sector that is innovating. The changing user demand for electronic payments is inspiring central banks to consider the future of payments. A topic of intense interest is Central Bank Digital Currencies (CBDCs). CBDCs (particularly retail CBDC) could create a new form of digital money, issued by the central bank, and available for households and businesses to use. Whether to issue a CBDC, for which use cases, in what form, and with what consequences are all major questions currently being considered by central banks and governments across the globe. No decisions have been made in the UK and we continue to work closely with a wide range of stakeholders to develop a clear understanding of the potential implications: positive and negative. The Bank of England and HM Treasury will consult later this year on the assessment of the case for a retail CBDC in the UK, including scope for further work.