The potential of retail digital currencies – the voice of the Governor of the Bank of England

Bank of England Governor Endorses Central Bank Digital Currency for Retail Use

Andrew Bailey, the Governor of the Bank of England, has expressed his support for introducing a retail central bank digital currency. He believes that central banks should be the ones leading financial innovations, as commercial banks have limited incentives to implement new solutions.

The Need for Modernizing Payment Practices

Bailey emphasizes the necessity to modernize key payment practices in both domestic and international transactions. Modern solutions based on digital technologies are required for both wholesale and retail transactions.

Concerns about the Pace of Innovation in Commercial Banks

While the Governor acknowledges that commercial banks should be the primary innovators in the area of retail central bank digital currencies, he is concerned that they are progressing too slowly and not investing enough in new technologies. There is also a lack of convincing evidence that these banks will introduce the necessary innovations.

The Necessity of Modernizing Existing Payment Methods

Bailey points out that current payment methods do not always facilitate innovation. There is a need to modernize commercial money to better meet the needs of users in today’s digital world.

The Role of Central Banks as Key Innovators in Retail Payments

In conclusion, the Governor suggests that if commercial banks do not take innovative actions in the field of retail payments, central banks may be compelled to assume the role of key innovators in this area. The decision on whether to introduce a retail central bank digital currency remains open and will require further discussions.

In summary, Andrew Bailey argues that central banks should play a crucial role in modernizing payment systems, providing convenient, secure, and efficient solutions for users worldwide.