8 9  https://www.ukfinance.org.uk/sites/default/files/uploads/pdf/UK-Finance-UK-Payment-Markets-Report-2019-SUMMARY.pdf https://www.gov.uk/government/speeches/mansion-house-dinner-speech-2019-philip-hammond 5  All speeches are available online at www.bankofengland.co.uk/news/speeches  5  Third, how should we respond to completely new systems for holding and transferring value which work not in central bank or commercial bank money but a new form of asset – a ‘stablecoin’? Under what regulatory conditions should they be allowed to operate – if they are allowed to operate at all? Fourth, and perhaps most fundamentally, if technology is able to offer new ways to store value and make transactions – two of the three core functions of money – where should the public-private sector boundary lie? Over the course of the last few centuries, the store of value for most citizens has increasingly taken the form of private, commercial bank, money. Over the last few decades, the same shift from public to private has happened for transactional money. The shift is accelerating and potentially new forms of private money are on the horizon. Against that backdrop, does technology offer us the chance to shift that balance back towards state money and, if so, should we take it? Central banks all over the world are grappling with these questions. These are not just national issues. Central banks and other actors internationally are also addressing the important and related question of how these technological opportunities could be used to improve the systems for transferring money and making payments across borders.
Our job is to ensure it works safely and reliably, through ups and downs, so that everyone in society can depend upon it. That means ensuring its value can be depended upon – monetary stability. It means ensuring that the banking system, which creates and issues most of the money we actually use, as well as the payment systems through which that money moves, are safe and can be relied upon – financial stability. It means ensuring that the physical money the Bank of England actually produces – the cash we use – cannot be forged and can be used with confidence. Money, of course, can be a slippery concept. It is, I think, best described as a social convention, the way we calibrate, exchange, store and settle claims we hold on each other in the economy. That convention has been expressed in very different ways at different times and in different societies. It can be expressed in different ways at the same time. At the moment in the United Kingdom, all money is denominated in one unit of account, the pound sterling 1, but it takes different forms. It can be expressed physically as actual claims on the state, in the form of the Bank of England: the banknotes we issue with the famous promise to ‘pay the bearer’. A very small proportion takes the form of physical tokens issued by the state that do not contain any claim – the coins issued by the crown.