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 think it would be preferable not to disturb the existence of both inside and outside money and the broad balance between them. But, this requires a number of things to happen and questions to be answered. It requires banks to be more active in thinking about digital commercial bank money and not leave it to CBDC. In any event, as we have set out in the CP, we think in this new world a central bank digital currency is likely to be needed to anchor the value of all forms of money, including new digital ones and to ensure the maximum opportunity for innovation in payments services. Moving on, let me now point to an area where we are at risk of contradicting ourselves. I said that assured value was a key principle of digital money. How does this fit with the idea that we could resolve failed banks and allow deposits (inside money) to take a haircut? One answer is that it depends on the size of the deposit above a certain threshold.
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.