BoE Governor Expresses Doubts About Case for Digital Pound (BoE)
Bank of England (BoE) Governor Andrew Bailey expressed doubts that there is a need for the central bank to introduce retail central bank digital currency (CBDC). Instead, he thinks that “commercial banks need to step up to the challenge of digital money provision… [because] if there are real benefits to digital technology in payments, we should want to see them in commercial bank money”. He also mentioned tokenized deposits as a way to apply digital technology to the form of money that we have today, with the challenge being to apply them to both domestic and cross-border payments. [Read more at the BoE]
The HKMA and the PBoC Launch Payment Connect (HKMA)
On June 20, 2025 the Hong Kong Monetary Authority (HKMA) and the People’s Bank of China (PBoC) announced the launch of Payment Connect. It will link Mainland China’s Internet Banking Payment System (IBPS) and Hong Kong’s Faster Payment System (FPS), to support secure, efficient and convenient real-time cross-border payments for residents and institutions in both countries. Residents will be able make instant small-value cross-boundary remittances by simply inputting the recipient’s mobile number or account number. [Read more at the HKMA]
Retail Central Bank Digital Currency: A Review and Assessment (SUERF)
SUERF published a paper by David Llewellyn, Charles Goodhart and Alistair Milne that critically examines the potential benefits, costs, and risks of introducing a retail central bank digital currency (CBDC). The authors argue that while proponents highlight advantages such as maintaining trust in the monetary system, enhancing competition, and promoting financial inclusion, these benefits may not outweigh the drawbacks or be uniquely addressed by a CBDC. The authors highlight risks like disintermediation of banks, financial instability, cybersecurity threats, and privacy concerns. Plus, retail CBDC could struggle to become a significant payments mechanism with the necessary critical mass unless it can offer additional or better payments mechanisms than are already available with commercial bank money and the wide range of other payment mechanisms. The paper emphasizes the need for a thorough cost-benefit analysis. [Read more at SUERF]
Upcoming Speaking Engagements:
The CB+DC Conference (Nassau, Bahamas, September 9-11) is a premier gathering centered on CBDCs, tokenized assets, and stablecoins. It provides a forum for central bankers, commercial bankers, technology innovators, policymakers, and academics to explore the latest advancements in digital currency, engage with experts and peers, and discuss the future of digital currency. [Register here but before you do, email me at john@kiffmeister.com for a 15% discount]
And just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So (only) if you work at a central bank, ministry of finance or international financial institution (e.g., the BIS, IMF, OECD, World Bank) and who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at john@kiffmeister.com.
