Sarah Breeden: Modernising the trains and rails of UK payments

Speech by Ms Sarah Breeden, Deputy Governor for Financial Stability of the Bank of England, at the Innovate Finance Global Summit 2024, London, 15 April 2024. 

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

Innovation in money and payments

The money we use to support economic and financial activity, and the payment systems we use as we do so, are fundamental to the Bank of England's role to maintain monetary and financial stability. Money and payments have been no stranger to technological innovation over many centuries. But the pace, breadth and depth of technological change we see now suggests even more radical change may be ahead of us.

My aim today is to set out how the Bank of England is seeking to ensure that we will be able both to capture the benefits of these advances and to ensure they are safe. I'll discuss how, as we consider the payments landscape in its entirety, we are increasingly focused on innovation in wholesale payments and the importance of payments innovation by banks. We'll publish a Discussion Paper on these areas this summer to draw on input and collaboration from the private sector, as a complement to the work we've been doing on stablecoin regulation and retail central bank digital currency (CBDC).

Looking back nearly five years ago, Facebook and others proposed a Libra stablecoin that aimed to apply technologies pioneered in the crypto-asset ecosystem to retail payments in the real-world on a global scale. That was somewhat of a bolt from the blue. It reminded us in the UK that, notwithstanding an apparently quick and seamless payments experience for many people (with near ubiquitous contactless card payments and new wallet apps like Apple Pay), technological innovation in money and payments was far from over.

Today, we see examples of interbank retail payment systems around the world – the Unified Payments Interface in India, Pix in Brazil, Swish in Sweden – that are used alongside cards for retail payments in a way that doesn't yet happen in the UK. Individuals can pay retailers in-store or online out of their bank accounts without going via cards – offering savings particularly for small businesses. And people increasingly make payments between different banks using only the recipient's mobile phone number or a QR code.