If stablecoins are to be widely used as a means of payment, they must have equivalent standards to those that are in place today for other forms of payment types and the forms of money transferred through them. This will ensure that they are safe and resilient and that consumers can use them with confidence. To reiterate, a key principle for payments is that users can be confident that the instrument they use to transfer value can be converted into fiat money at any time. And, in the rare circumstances that the entity that issued that instrument fails, that there are clear rules and protections for the payment recipient and for the consumer. It is this assurance that stabilises the value of the transfer asset so that all parties in the economy can rely on it. Banks achieve this by giving the customer a money claim at par, supported by banks’ access to central bank facilities and extensive regulation of banks’ activities, including a protection scheme for customer deposits up to a certain amount. It is these protections that mean that individual shop owners don’t worry about scrutinising which bank issued your debit card before you tap it to pay. It is these protections that prevent a return to the literal wild-west in which individual banks issued their own private currencies, which were worth different amounts depending on recipient’s assessment of the soundness of the issuing bank.
Reinventing the Wheel (with more automation) Speech given by Andrew Bailey, Governor of the Bank of England  Brookings Institution, Virtual Event 3 September 2020  I am grateful to Josh Sadler for his assistance in drafting these remarks and Paul Brione, Nicholas Butt, Alice Carr, Ellen Caswell, Victoria Cleland, David Copple, Michaela Costello, Jas Ellis, Chris Ford, Lee Foulger, Sarah John, Louise Johnston, Cordelia Kafetz, Barry King, Jeremy Leake, Manisha Patel, Francine Robb, Christina Segal-Knowles and Michael Yoganayagam for their input. 1  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  Introduction Even central bankers can sometimes be accused of overusing language. So, the world is always more uncertain than ever – except that at the moment it really is. And, innovation is all around us except in the productivity numbers. One area where innovation really is around is the world of payments, the focus of my remarks today. Innovation is a good thing. As authorities and regulators it is not in our interest – the broad public interest – to stop innovation. Moreover, when supported by clear standards and expectations, innovation can support the pursuit of public interest objectives such as greater inclusivity and network resilience. Making such standards clear early is much preferred to attempting to claw back the ground later, and particularly if that comes after things go wrong. This is the backdrop to innovation in payments, particularly in the area of so-called digital currencies, developed to offer new forms of “money”.