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This looks very similar to the UK's Regulated Liability Network "a financial market infrastructure (FMI), operating a shared ledger with central bank money, commercial bank money and electronic money on the same network", being managed by UK Finance.

Some of the participants are the same in both - is there a connection?

"we must not forget the contribution that retail central bank money has made to monetary and financial stability."

The BoE ties itself in knots trying to justify a retail CBDC - in the same speech the deputy governor admits that cash has dropped from around two-thirds of transactions twenty years ago to 14% in 2022. This drop has had no impact on monetary or financial stability and it demonstrates consumers have no preference for central bank money over commercial bank deposits (and I doubt most have any idea of the difference risk profiles of the two).

In the past, cash was a source of instability as it provided a mechanism for a bank run, with depositors able to withdraw their savings en masse. Nowadays, if a bank is in trouble depositors are highly unlikely to withdraw cash at scale but instead transfer deposits electronically to other banks (as happened with Northern Rock in 2008) - the banking system may freeze up for a while as banks refuse to lend reserves to each other when large volumes of deposits are transferred between banks, but the total value of deposits in the banking system remains the same and locked-in without cash withdrawals.

A retail CBDC would reintroduce this stability risk if depositors are able to withdraw deposits instantly out of the banking system electronically into a retail CBDC, causing a run on multiple banks.

The interesting aspect of this speech is that a wholesale CBDC is gaining traction in the BoE's plans. A wholesale CBDC is in the sweetspot of a central bank and has some real benefits - hopefully the BoE will focus more on a wholesale CBDC and quietly kick the retail CBDC idea into the long grass. 

This is all hypothetical - HMT itself admits it can find no GBP stablecoins in use. On coinmarketcap.com you can find poundtoken with a marketcap of £106k and a rather alarming price of 97p and Upper Pound which looks defunct with a price of just 16p.

In contrast, there are several USD stablecoins, the largest being USDT with a market cap of $104bn and USDC at $32bn. UK stablecoin regulation can be based only on the experience of these USD stablecoins and also it seems on risks associated with unrelated crypto-currencies such as FTX which are very different to fiat-backed stablecoins.

It is a case of putting the cart before the horse.

It would help if reports like these define a digital wallet, presumably a mobile app or browser extension, but there are many payment method that could be deployed in a digital wallet:

- cards

- bank account

- e-money account

- third-party bank account orchestration (open banking)

- non-fiat crypto-currency self-custody account

- non-fiat crypto-currency custodial account

- fiat stablecoin custodial account

- fiat stablecoin self-custody account

All these are very different, all are capable of initiating payments, only some can receive payments.

e-money intistutions hold about 35bn EUR in customer depoits in Europe compared to about 17trn EUR in commercial bank deposits. That's 0.2% - difficult to see how EMIs  and by extension stablecoins pose a threat to banks.

I think you will find it difficult to charge a fixed fee of £3 for transfers into/out of Japanese Yen - you can find little information about it, but the banks there have a tight control over FX flows and fees. Same for Taiwan.

'Access to Cash' looks like a ploy to give the impression the government is doing its best to preserve its use.

Whereas in fact the intention seems to be to let cash wither on the vine, even accelerate its decline.

Unless there is a 'Cash Acceptance' initiative and policy to preseve acceptance, 'Access to Cash' is an impotent initiative.

This article omits to mention that there were 51,529 responses to the consultation of which 555 were from organisations through the online questionnaire. 40,330 were from individuals also through the online questionnaire. Presumably the remaining 10,644 responses by email and letter (41) were from individuals as well.

These numbers are huge/off-the-scale for a government financial sector consultation - as a comparison the recent Garner Future of Payments Review attracted around 60 responses, mainly from organisations.

Given the extraordinary number of responses from members of the public this looks as much a public petition as it is a consultation.

Unfortunately, there is no breakdown of the responses to each question so it is impossible to know the weight of feedback nor the contrast between the views of Fintechs, academia etc on what they believe the public want versus the actual views expressed by the public in the individual responses.

However, it clearly shows public concern on the 'digital pound' is running very high.

Interesting inititiative - browser extensions seem to be used increasingly by consumers, sufficiently so for Citi to launch this product. Good move.

Good points - the triumvirate to be wary of is the unhealthy connection between Big Tech, Big Government and Big Banking