We want to ensure that central bank money remains available for the public to use everywhere in the euro area for their day-to-day transactions – not just in its physical form, but in digital form too. But we are also actively working to modernise the payment infrastructure underpinning our financial system. Technologies and preferences are changing, and preserving the role of central bank money as a safe asset at the heart of the system remains key. It strengthens the confidence in the smooth functioning of the financial system. The discussion on the wholesale version of central bank digital currencies – wholesale CBDC for short – is often prone to confusion, however. Wholesale CBDC is generally presented as something new, made possible by the emergence of distributed ledger technology (DLT). [1] But wholesale CBDC has existed for decades. And it has provided efficient digital infrastructures for the settlement of transactions between banks in central bank money. The discussion about wholesale CBDC should therefore focus on how existing infrastructures have to be adapted as technologies and needs evolve. Today I would like to demystify this concept of wholesale CBDC. I will first clarify what wholesale CBDC is and what it is not. I will discuss the emerging need to adapt the wholesale infrastructure to evolving user demands. And then I will outline some of the technological choices that lie ahead. Defining wholesale CBDC Let me start by clarifying some frequent misunderstandings about wholesale CBDC. First, there is confusion surrounding the term “wholesale”.
Five of us are drawn from the executive of the Bank, increasing to six when microprudential supervision of banks and insurers moves across in  5  Hyun Shin has set this out with great clarity. 6  See Tucker, Comments at Clare College, discussion of Lord Turner’s Lecture, “Reforming finance: are we being radical enough?”, Cambridge, February 2011. BIS central bankers’ speeches  5  2012/13. The two senior officials of the UK’s existing regulator, the Financial Services Authority, are members during the interim period. And once the legislation has passed, the chief executive of the planned new securities/consumer regulator, the Financial Conduct Authority, will be a member, reflecting, as I have outlined, the vital role of market regulation in preserving stability. There are four external members, including from the USA Don Kohn, the former Vice Chairman of the Federal Reserve Board. The Government expects the legislative process to be complete towards the end of 2012. In the meantime, during the interim, non-statutory phase of our existence, the Financial Policy Committee has two broad functions: “paving” and “shadowing”. We will pave the way for the statutory incarnation of the Committee by advising the government on the instruments and powers we could be given by Parliament. And, secondly, we will as far as possible shadow the role of the statutory FPC, which essentially means advising the FSA on where and how it should use its regulatory tools for system-wide ends. So what are those ends? They are consistent with my earlier overview of financial stability.