This built on a speech by Sarah Breeden in April where she outlined the Bank’s interest in the ‘trains and rails’ of payments, capitalising on the benefits of innovation in payments while ensuring they remain safe. The Discussion Paper covers a range of topics in retail and wholesale payments and explores the role that a central bank should take as payments and money move onto digital platforms. 

We have worked with member firms from across the payments and capital markets sectors to develop a comprehensive response to the Discussion Paper. In addition to answering the nine specific questions posed, we have given guidance on the key priorities for long-term investment and growth in the UK payments market, and a recommended way of working for the Bank as it takes more leadership in wholesale and retail payments.

Our core recommendations are:

• One regulatory voice, led by the Bank of England, that can provide strategic decision-making on future money and payments infrastructure. 
• A greater decision-making role for the industry in the development and delivery of future payments infrastructure. 
• Excellent delivery capabilities, that can execute on the strategic investment decisions needed for the UK and provide confidence to those that invest in that infrastructure. 

Our response provides further details on a number of workstreams including:

• Delivering on a National Payments Vision and Strategy and how this can be taken forward in partnership with the Bank. 
• The future of the UK’s real-time payments infrastructure and developing a new delivery model.
• The Regulated Liability Network and its next phase providing support to the Bank’s proposed experimentation. 
• Digital gilt, a digital sovereign bond issuance, ideally settled using on-chain forms of wholesale settlement.
• Digital Securities Sandbox (DSS) and how its benefits will be significantly amplified by the availability of digital money solutions (including central bank-provided ones) within the Sandbox. 

To deliver the payments roadmap for the National Payments Vision & Strategy, and allow for delivery, we propose the formation of a joint Payments Infrastructure Coordination Group, comprising industry and authorities. A clear, prioritised and stable multi-year change agenda is essential for effective planning. This group should prioritise the delivery of initiatives intersecting existing infrastructure (for example Real Time Gross Settlement, Faster Payments, LINK) and future projects (such as the Regulated Liability Network and Digital Pound), as well as consider how this enables the ecosystem of innovators, fintechs and overlay services (including Digital ID and Open Banking) to flourish. 

For more information contact briony.krikorian-slade@ukfinance.org.uk.