Andrew Hauser: Old dogs, new tricks - adapting central bank balance sheets to a world of digital currencies

Remarks by Mr Andrew Hauser, Executive Director for Markets of the Bank of England, at the Federal Reserve Bank of New York and Columbia SIPA (School of International and Public Affairs) Workshop on "Monetary Policy Implementation and Digital Innovation", New York City, 1 June 2022. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

The explosion of interest in digital currencies poses deep and challenging policy questions on everything from monetary and financial stability, to privacy, competition, money laundering and social inclusion. Public authorities are evaluating the arguments for and against introducing their own Central Bank Digital Currencies (CBDCs). 1 And in the private sector there's a lively debate about what it might take to make so-called 'stablecoins' genuinely stable.

Up to now, though, there's been less discussion about how central bank balance sheets might need to adjust to support the safe and effective provision of fiat-based digital currencies. This workshop is therefore well timed.

I will focus my remarks today around five main messages.