The potential tokenisation of money and development of new ways of transferring it in transactions has major implications for the Bank of England. It is not just that we are responsible for ensuring that payment systems work seamlessly and without disruption in the UK, crucial though that is for financial stability. It is also, and more fundamentally, because we are ultimately responsible for ensuring that each of the monies circulating in the UK – and at present we have around 800 private banks, building societies and credit unions issuing money[8] - are both robust and uniform. By robust, I mean that users can have confidence that the money will be useable and accepted in transactions. By uniform I mean denominated in the same currency unit – Sterling – and seamlessly exchangeable for any other money in circulation on demand and without loss of value. Against that background, I want to look at four areas where the tokenisation of money is now being explored. The first is stablecoins used for payments, the second is the tokenisation of commercial bank deposits, the third is the next stage of the Bank of England’s work on issuing a Digital Pound and the last is the Bank’s work to ensure to ensure these new forms of money are robust and uniform. The emergence, in the world of crypto assets of so-called stablecoins is at the forefront of developments in the tokenisation of money.
Thanks to deregulation, more Swedes have been able to borrow at a reasonable rate of interest, making it possible for a larger number of people to own their own homes and to better distribute their consumption over their lives. In this respect developments in Sweden have largely followed those in the US and the UK. Of course such deregulation - or rather reregulation - is not problem-free. The fact that a greater number have the opportunity to borrow also implies increased risks in the financial system. But in the absence of risks, growth opportunities also decrease. The important thing therefore is that the risks can be managed in the event of a crisis, which, for instance, requires strong consumer protection. Here Sweden has also been at the fore by being the first to publish regular stability reports for the financial sector, with a view to avoiding any reoccurrence of a systemic collapse similar to that at the beginning of the 1990s. There are now signs on the Continent that the pace of financial market reform has increased. This is partly because the EU Member States, as a part of the Lisbon strategy, have agreed to implement the Financial Services Action Plan. Only last week new steps were taken to harmonise securities trading between the EU Member States through the signing of the Investment Services Directive. This affords both private investors and institutions greater opportunities to trade on exchanges other than those in their own country.