Bank of England Releases Discussion Paper on Stablecoins, CBDC

The paper focuses on the effects of private stablecoins on the cost and availability of lending and the challenges for monetary policy.

Jun 7, 2021 at 11:59 a.m. UTC
Updated Sep 14, 2021 at 1:07 p.m. UTC

The Bank of England released a second discussion paper exploring new forms of digital money including stablecoins and a potential U.K. central bank digital currency (CBDC).

  • The paper published today follows a previous discussion paper published in March 2020 that highlighted the broad risks and opportunities in launching a CBDC.
  • The new paper focuses on the implications that adoption of private stablecoins could have for the cost and availability of lending, and the difficulties this could present for monetary policy.
  • New forms of digital money could offer benefits of cost and functionality, while a CBDC could enhance the effectiveness of monetary policy by shortening the timescales for clearing and settlement.
  • "But these opportunities can only be realized if new forms of digital money are safe," the paper said. "They could be privately provided – in the form of stablecoins. Or they could be publicly provided – in the form of a CBDC."
  • The Bank of England is inviting responses from stakeholders in banking, payments and elsewhere in financial services.


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