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Bank of England deputy governor says digital pound may be needed by decade’s end and urges clear regulation of stablecoin payment systems
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Summary
Sir John Cunliffe (Bank of England) told a Federal Reserve‑hosted conference that the 2019 Libra announcement spurred urgent global work on cross‑border payments; he previewed the Bank’s digital‑pound consultation, noted 50,000 responses, and outlined principles for regulating systemic stablecoin payment systems.
Sir John Cunliffe, deputy governor for financial stability at the Bank of England (whose term was concluding), delivered a keynote arguing that the 2019 Libra announcement galvanized central banks and regulators and that work to improve cross‑border payments, explore central bank digital currency (CBDC) design and set stablecoin standards remains urgent.
On cross‑border payments, Cunliffe described the G20/CPMI/FSB roadmap and its 19 building blocks to address cost, speed and reliability. He noted practical progress—broader ISO 20022 adoption and interlinking pilots in Asia—but said monitoring shows the world is only about halfway to the 2027 targets and called for continued investment in infrastructure, data standards and governance.
On a retail CBDC, the "digital pound," Cunliffe stressed no decision has been taken but said the Bank and Treasury’s consultation suggests a public‑sector digital money could be necessary by the end of the decade to preserve public access to central bank money as cash use declines and to support competition and innovation. He reported the consultation drew over 50,000 responses and emphasized privacy, programmability and guaranteed cash access as central public concerns.
Cunliffe also previewed the Bank’s forthcoming discussion paper on regulating systemic payment systems using stablecoins. He described international work (CPMI‑IOSCO guidance and FSB recommendations) and set out several design principles: an identifiable legal entity responsible for end‑to‑end risk, high‑quality liquid backing assets (central bank reserves or government securities) for systemic use cases, and a regulatory approach that aims for "same risk, same regulation." He said some business models (maturity and liquidity transformation) belong in the banking regime rather than a payments regime.
Cunliffe framed the public‑policy choice as preserving confidence in the form money takes and enabling innovation without compromising stability: "It's likely to be necessary to issue central bank money in digital form to support confidence in money," he said. He added that international standards are only effective if implemented nationally and that transparent regulatory boundaries will help responsible innovators.
In audience questions Cunliffe emphasized optionality rather than choosing between big tech, big banks, or big central banks; he stressed cyber resilience would be developed with national authorities if a CBDC proceeds and noted interoperability and API standards remain important international issues. He closed by saying central banks must ensure that "money works"—that people can use it with confidence in value and acceptability.
Cunliffe’s keynote maps ongoing research and policy work—cross‑border payment reform, CBDC experimentation and stablecoin regulatory design—and frames them as mutually reinforcing efforts to preserve confidence in money while allowing innovation in payments.
