Bank of England Deputy Governor Sarah Breeden says tokenization could enhance payment efficiency and market competition while preserving trust.
Bank of England Deputy Governor Sarah Breeden outlined tokenization’s potential to reduce costs and boost competition in financial markets. Speaking at London’s City Week, she emphasized digital ledgers could improve payment efficiency and settlement speed, provided trust and interoperability are maintained.
Breeden stressed central bank money would remain the monetary system’s anchor, even as private-sector innovations like tokenized deposits and regulated stablecoins expand. The BoE is collaborating with regulators and industry to develop a framework supporting innovation without risking financial stability.
She suggested users could eventually pay with tokenized bank deposits, regulated stablecoins, or a retail central bank digital currency (CBDC). Increased competition from diverse technologies could lower costs and enhance functionality, she added.