In our 2021 Discussion Paper on ‘New Forms of Digital Money’, we explored the financial stability risks and impact on the banking sector of the emergence of non-bank digital monies. Modelling of an illustrative scenario suggested that retail deposit outflows into digital money would affect banks’ funding and could lead to higher bank lending rates, although the impact was expected to be modest. This modelling was based on assumptions, set to be highly cautious[9], about the amount of non- bank digital money households and businesses might want to hold and hence the scale of possible outflows from retail bank deposits. Page 8  We cannot, of course, know ex ante, how households and businesses would respond to a digital pound and how much they would want to hold. We therefore propose that to manage financial stability risks, initially at any rate, the digital pound would need to be designed in a way that enabled some restrictions to be placed on amount an individual or business could hold. We propose a limit of between £ and £ per individual as the appropriate balance between managing risks and supporting wide usability of the digital pound. A limit of £ would mean that three quarters of people could receive their pay in digital pounds, while a £ limit would allow almost everyone to receive their pay in digital pounds[10], keeping outflows from the banking system broadly within the assumptions set out in the Bank’s earlier modelling work.
See for Example ‘Central bank digital currencies: foundational principles and core features series of reports  . ’ (2020) and the  on digital currency aspects (e.g. financial stability, system design) published in 2021. 17. These are likely to involve testing individual components of the digital pound architecture (against standards built on the considerations set out in our Technology Working Paper). Project Rosalind , being run out of the London Centre of the BIS Innovation Hub is one example of the kind of work we envisage. That project is currently running a tech sprint and expressions of interest are open until 10 February.