CBDC could improve banking stability – Haldane
BoE chief economist envisages banking sector split between payments and credit provision
Central bank-issued digital currency could improve banking sector stability by creating a new class of “narrow” payment banks, Andy Haldane said on November 18.
The Bank of England chief economist noted central bankers often worry about the destabilising effect of a CBDC, if it draws deposits away from the banking sector.
But Haldane suggested a CBDC could promote stability, by separating banks that only offer payments backed by safe assets from those that offer credit services based on
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