The Bank of England is intensifying its focus on digital money. Deputy Governor Sarah Breeden said Tuesday at London's City Week that tokenization - representing assets and money on digital ledgers - could reduce costs, speed settlement, and increase competition. She stressed that central bank money will remain the anchor of the monetary system, even as tokenized deposits and regulated stablecoins gain traction.
Breeden stated that alongside traditional bank deposits, people should be able to use tokenized bank deposits, regulated stablecoins, and potentially a retail central bank digital currency (CBDC). She emphasized that more competition from a wider range of technologies and business models should lower costs and improve functionality for users.
The UK is also preparing its financial system for tokenized assets. On Monday, the BoE proposed extending its core settlement infrastructure operating hours to near 24/7 availability, aiming to support cross-border payments and securities settlement.
This follows Breeden's earlier comments that the Bank was reconsidering its approach to pound-sterling-denominated stablecoins, including easing limits on consumer holdings, as policymakers seek to strengthen the UK's position as a competitive digital asset hub.