 Felly, rydych yn gweithio, a gwybod llawer o'r webinar fwy yw'r gweithio, ond y cyd-dioddau cysylltu ymddangos. Yn ymddangos ychydig i'ch gwybod i'ch gweithio i'r gwaith? Yn y dyfodol, rwy'n hoffa o Gweithio Sol-e-Omar-o-fa, yw'r ddweudio ymddangos cyfnod a'r profesiol ym Llywodraeth Cymru ym Ysgol. Felly, rydych am Ysgol Simon Yw, felly ymddangos cyfnodol ac ymddangos cyfnodol ym Gweithio. ac mae'n ddweud y cwanae. Yn ymddangos, mae'r gweithio cyfnod ffyrdd ymddangos i'r ddweud y Llywodraeth Cymru yn gweithio'r Pound digital, fel yna gwybod ymlaen chi'n Llyfridog, i'n ddweud o'r adnodd i'n gwybod i'ch gwneud hynny'n ysgrifennu ffordd. Yn ymddangos, Rachel Oliver. Rydw i'n ddiweddol i'n gweithio – rydw i'n gweld cyfnodd ymlaen chi'n gweithio. Rydw i'n gweithio ar gyfer aci ac Zach, yn helpu ni'n meddwl i'ch gweithio i moddol. Rwy'n rhan o'r gweithio ar ywe. Rydyn ni'n gallu bod hi'n meddwl am y website arall i siaradau. Rydyn ni'n rhan o'n golygu i'r Gweithdeithasol i YouTube. Ti'n ddim nifer o'r gweithio i ni, Simon a Solae. Mae'n dwi'n gweithio â'u gweithio ar y dŷlch. Rydyn ni'n gweithio i gweithio ar y Gweithdeithasol y cwm-a, i'r gwaith dillwn i'n bwysig, ond y cwestiynau'r cwestiynau yn gwneud ychydig yn ymweld. Mae'r gwaith yn gweithio'r cwestiynau a'r gwaith yn defnyddio'r cyfnod i'r gwaith. Felly y gallwn i'r gweithio, mae'n meddwl cyfaint gan y cyfaint ac ei wneud cofnod, mae'r gweithio'r gwaith yn y ffordd y 2008 a'r cyfaint. Mae'r cyfrannu o gwneud, gweithio, bans, ac ymgyrch yn cael ei gwybodaeth a'r pwyllgor i'r gwahanol. Mae'n mynd i ddweud i ddweud sofodd o'r ffordd i ddechrau cynhyrchu plantol ac mae'n gweithiaeth y bwysig i'r unrhyw gyda hwn yma, ac mae'n mynd i ddweud i ddweud i ddweud i ddechrau cyfnodau mae'n mynd i ddweud i ddweud i ddweud i gweithio gyngcofennol. idea of publicly issued digital currencies, which is what brings us here today. The UK government is currently consulting of, there me one second, I'll just stop sharing, here we go. Sorry, the UK government is currently consulting on a digital pound after concluding it's likely one will be needed by the end of this decade and it could come as early as 2025. So to kick us off on this webinar, I'm first just going to give an introduction to what a digital pound actually is before we hear in more detail from our speakers. Lots of people are aware that cash has a lot of benefits. It's straightforward to use, protect our privacy and is accessible for everyone. It's especially important to people who aren't well served by digital payments, such as rural communities, the elderly, people facing challenges with disabilities and mental health, asylum seekers at risk of deportation, people without homes and many others. And unlike the privately issued money in our bank accounts, cash is actually publicly issued by the Bank of England. But lots of shops are starting to insist people pay by card. Cash machines are increasingly charging us fees to take out cash and banks are closing down local branches, making it much harder for people to access cash and the in person banking services that many people rely on. The shift towards a more digital economy means we are at risk of losing all these important benefits of cash and private big banks and tech companies are deliberately pushing for us to use the digital money they control as much as possible so that they can make more profits. But there is an alternative, the digital pound. The digital pound could be an opportunity to build a better, fairer system. We could both help protect our access to physical cash for the future and embed many of the benefits of cash at the heart of the digital economy too. With the digital pound, the money wouldn't be held in account with a high street bank, but instead it would be held in an account at the Bank of England or provided by the bank as a digital token in a similar manner to physical bank notes. The Bank of England would be responsible for issuing new digital pounds into the economy. Just like cash, the digital pound would be publicly issued. This would make it very different to cryptocurrencies like Bitcoin. People using the digital pounds would have better protections against fraud and scams. The value of one digital pound would always be equal to one pound of cash, making it much more stable in value than cryptocurrency. Finally, a digital pound would also make our financial system significantly safer because anyone who wants to make electronic payments currently they have to use private banks to make payments. So the failure of one large bank could be catastrophic. As we saw in 2008. But by using public digital money that's safe in a banking crisis, a significant amount of risk would be removed from the financial system. So positive money is calling for the digital pound to be designed as a foundation for a fairer money and banking system where everyone has access to digital payments for a secure public service and cash is productive for everyone who wants to use it. So there are lots of issues that this topic brings up from financial axill, excuse me, financial accessibility and inclusion, privacy and sovereignty in our money system to name a few. So in this first webinar on this topic, we're aiming to simply crack open the conversation and look mainly at what a digital pound is and what it could mean for us and our financial system. So let's get stuck in. I'll now introduce our first speaker, Soleil Amarova. Soleil is a professor of law at Cornell University in the US. She specialises in financial sector regulation and the broader issues of finance and our economy. In 2021, Soleil was nominated by the President Biden to serve as comptroller of the currency, which is a key financial regulatory position in the US. But she chose to withdraw after a fierce campaign against her, orchestrated by the banking lobby. This was despite senators recognising Soleil as one of the most qualified nominees ever for the role, given her distinguished career as an academic, as an advisor to governments and as a lawyer in the financial sector itself. Soleil has written extensively on the topic of how our financial system could be reformed to support a green new deal and how in her paper, The People's Ledger, she provides a blueprint for how sovereign digital currencies could democratise money and investment. Soleil, we're thrilled to have you with us today. Thank you for being here. Over to you. Thank you so much, Rachel, for such a kind introduction. One might say too kind of an introduction. And thank you for inviting me to speak in today's gathering, because this is an incredibly timely and important discussion right now. Digital money is here, digital sovereign money is coming. Some might say it's already here as well. And the question really now is what it will look like in the UK, in the US, in Europe and in other jurisdictions, what it will do and whom it will benefit. So the question about sovereign digital money, like digital pounders, central bank digital currency, CBDC, right, is the debate currently in the mainstream is suffering from a fundamental flaw, at least in my view. Currently, the entire debate is extremely technocratic, it's almost entirely dominated by central bank economists, which is not in and of itself a problem, except it is discussed only as a payments system issue. In other words, we approach digital pound or digital dollar or digital euro as one among many types of solutions to making payments easier, more convenient, faster and cheaper. And as such, the CBDC proposal, each CBDC proposal needs to be justified by proving its marginal benefits over the existing mainly private payment alternatives like stable coins or the existing banking system or some kind of open banking or real time gross settlement type of a payment system. And that inherently puts proponents of CBDC or sovereign digital money into a defensive posture because it's really difficult to prove that something that has never been done is actually going to be faster and more convenient as something that the private sector can do fast and conveniently. So in the United States context, the state, the government is already in the defensive posture when it comes to any kind of participation in the financial economic markets. But deeply, on a more deeper level, this discussion really limits our ability as the public fundamentally interested in this debate limits our ability to weigh in. Because it is so technical, it is about the back office kind of a support system rather than about distribution of financial resources rather than about distribution of political power that it might be. So in fact, rather than being simply about faster payments, the debate about CBDC really is about the structure and control of the financial ecosystem. And that's because digitized tokenized money is fundamentally qualitatively different from any kind of money that we previously had or have currently even in electronic form. So tokenized money is separable from the underlying liability or obligation. In other words, the token form itself makes the token a transferable, therefore tradable asset. It can move separately from what we understand as the source of the economic obligation, which has never been really done before, and it is also malleable and programmable. It can, the token can signify a potential combination of an infinite number and kinds of economic rights and claims, again, a very new quality that we can now program into a particular tradable token and most importantly, a tradable token which can serve as a form of money or the tradable asset is an investment form or anything of that kind can be created or controlled or created and controlled by pretty much anyone, anyone who has the technology and who can create the sort of native money transfer and record keeping or payments system. And that is what fundamentally poses a threat to the sovereign public's ability to maintain the flow of sovereign money through the sovereign publicly controlled and publicly managed payment system. And very importantly, this makes digital money a perfect tool for use in leverage trading and regulatory arbitrage. So if privately controlled and privately created digital money becomes ubiquitous enough in wholesale market, it will make financial system extremely unstable and potentially dominated by a few large techno financial conglomerates and will make it nearly impossible to regulate or control effectively. So all of this is basically just to say how dangerous it is to leave digital money in private hands because it would combine the old familiar socialist suboptimal private incentives with qualitatively new and potent tools, which is the tokenization and digitization of financial assets creates. So what's the stake here in this debate about digital pound or digital dollar is not simply the speed or form of the payment system, but control of the creation allocation of digitized tokenized sovereign money. So this debate is ultimately about the balance of public and private power in the financial system. It is an institutional and political challenge to our existing system of hybrid banking in which private banks currently create deposit money, private liabilities that circulate in the economy as fully equivalent to sovereign money. And that is thanks to an elaborate government backing for private deposit money creation that includes deposit insurance, that includes access to the central bank's balance sheet whereby the central bank, the Bank of England, the Federal Reserve accommodates or monetizes bank liabilities by continuously clearing and settling payments through its own public payments infrastructure. And it's really critical that banks create this new deposit money by extending loans. It's kind of a clever scheme that has historic roots and an important sort of continuity built into it based on this presumed micro level informational advantages that private banks have in terms of finding out where the real economy needs credit money and basically plugging that hole. Right. So modern banking is a bundling of two critical functions, money creation and credit allocation, both of which are publicly subsidized. But provided by those private institutions for private profit. And that system, of course, is inherently unstable. So despite the increasingly complex technical regulation, it does lead to a current crisis and results in this persistent pattern of socializing losses and privatizing gains. So while this was historically justified, today's public and institutional and technological capacity potentially enables us to correct its dysfunctions. But whether or not we actually will correct its dysfunctions using the new technology depends on the fundamentally political choice who gets control, who gets control of this digitized new form of money. So there are two choices. One is wholesale or fully intermediated CBDC, which will leave the actual control over digitized, tokenized money and assets in private hands. So the digital pound in the scheme or digital dollar in the scheme will still be the central bank's direct liability. But functionally speaking, it will simply serve a function of this sort of being a direct input in digital asset trading and not much more. It will be just a back office function that again, once again, the public puts up its balance sheet to support otherwise privately determined and privately run financial system that is so geared toward trading, particularly because it's digitized now. The second choice is direct CBDC, which in my view is a more effective tool of preventing the loss of public's ability to control money and finance. It can't truly be a sovereign digital money and not simply a government run payments channel on the back end of still private credit money creation and allocation. However, currently, it seems that the general consensus that is emerging in the circles that are basically making these decisions is that any CBDC that will finally be created is going to be wholesale, fully intermediated CBDC, which is basically simply a tokenized version of the existing hybrid public private system in which private banks create money and allocate credit. And then with that choice, the entire discussion right now is centred upon complex technocratic design issues, all of which ultimately aim at essentially weakening the impact of CBDC on the entire financial system and very importantly on the economy. So the principal fears and concerns in that in that debate are that CBDC poses significant privacy issues. And of course, that is a very legitimate, a very serious question that needs to be addressed with any kind of CBDC design, but there are technical, technological and institutional design solutions that could significantly improve the privacy protections of any kind of a CBDC system. The two other fears have nothing to do really with privacy and have everything to do with the power distribution in the current financial system. So one fear is the fear of disintermediating existing private banks. And the fear here is that what will happen to the existing banking system, isn't it too much of a disruption? How shall we then ensure that credit flows into the real economy? Because banks happen to be not simply the money creators and deposit deposit taking institutions, they also are lending institutions. And the second fear is generally the fear of the increasing size of the balance sheet of the central bank and the increasing footprint of the central bank, be it the Bank of England or the Federal Reserve in the economy overall. And that is that is basically the issue on the asset side of the central bank. What will happen? People say, if we actually allow these unlimited issues of CBDC, digital pound or digital dollar by the central bank, what will happen on the asset side of the central bank? We have no idea what might happen there, right? So to me, while the privacy concern is a real concern and we really need to think about it, there's two other concerns about potential structural disruption of the banking system, as we know it, and potentially an increased footprint of the central bank in the otherwise market based exchange based economy. Actually, those two fears are not so much problems as potential opportunities. The other opportunities to finally redesign our dysfunctional hybrid private public banking system in which, as Rachel so astudly noted, we constantly run into these moments of instability that is generated by unlimited, unchecked pursuit of private gain, speculative profits at the expense of long term financial stability, but also at the expense of allocating credit to publicly beneficial uses in the real economy. So instead of dealing with this constant instabilities and constant sort of skewing of the allocation of economic and political power in the financial system because of this sort of unfair access and unfair bailout pattern in our current sort of condition, right? Why can't we actually unbundle these two critical functions that private banks perform on behalf of the sovereign public and with public support and with tremendous public subsidy, which is money creation on the one hand and credit allocation on the other hand? In other words, unbundling these two functions and making safe deposit money creation truly and fully and explicitly a public function. By effectively migrating all of the transactional deposit money accounts to the books of the central bank itself rather than doing it in an intermediate fashion through this, through the balance sheet of private banks. And on the other hand, treating a credit allocation issue, the flow of credit into the real economy as a separate institutional concern, as a separate policy issue that can be fine tuned through a combination of public and private elements in how we generate and how we channel and direct that credit on an economy wide basis to truly productive enterprise. So back in 19 in 2021, sorry, I got mixed, mixed my centuries a little bit. I wrote a piece called The People's Legend in which I actually try to explore the full potential of a direct retail CBDC in which this particular unbundling of the two functions is done so that all money creation becomes fully sovereign and digital tokenized and the credit allocation actually flows through a combination of public, private, sort of a public, private system. So mechanism of this reform is restructuring the central banks balance sheet, both the liability side on which the digital dollar or digital pound would reside and the asset side. That's the issue that never really gets or never really got to be explored in the academic policy debate and take a holistic integrative approach to institutional change and see where that would take us. So in my example, I use the New York Fed because that's the example that is most near and dear to my heart and something that I know the best. But the scheme is generally applicable to the Bank of England, for example. And I'd be really interested in how Simon and Rachel and all of you basically think about that. So let's start with the liability side. On the liability side, the proposal is to create direct CBDC account, just like Rachel said, each household, each business, each entity and each individual would be entitled to open a free of charge transactional account directly in which the liabilities of the central bank basically are credited to that account and used by people and entities as money. So I envision it not as an option, a public option alongside existing private bank deposits, but as a full migration in order to create this kind of clear picture, an ideal type of what this type of a fully sovereign digital money would look like. And also because I believe that creating a public option alongside private deposits would actually have potentially devastating financial stability consequences, but that can be discussed later. So basically everybody, I can go and open an account of the Fed, Simon and Rachel can open accounts at the Bank of England. And there are different institutional design choices here, for example, to avoid the extreme administrative burden of basically onboarding every depositor onto the balance sheet of the central bank. For example, the administrative function of running, managing these accounts can be outsourced to certain banking institutions. So in the context of the United States, I propose that that would be community banking institutions, not the big banks, trading institutions like JP Morgan or Citibank, but smaller banks that are actually conforming to the traditional notion of what a good private bank looks like. It's a small institution that really serves the needs of the community and channels credit into the mums and pop shops and to local businesses and small and medium enterprise and so on and so forth. So why not make them the direct agents of the Federal Reserve or the Bank of England, for example, in basically performing your customer kind of procedures on every depositor running the administrative machine with respect to each deposit. For example, every deposit would be getting the financial statements on a monthly basis directly from the small bank in which they used to bank when that was a private deposit, except the liability is not the liability of that small bank, it's the liability of the central bank. And for that service, the agents, the administrative agents of the central bank, this community banking institutions that are licensed would be remunerated with a fee. But the key difference here is that they will not themselves actually create money, right? One can also imagine other private sort of payment services providers that can be offering various apps on top of that sort of fundamental baseline for making kind of payments maybe easier or faster or what not. But again, the key point is that no private institution will actually be entitled to create new purchasing power by extending loans, for example, the way they do now. The key benefits of that kind of full migration of money creation onto the central banks balance sheet is that in addition to providing fully safe digital sovereign money that anybody can use and without discrimination, this would actually create a more direct and effective transparent monetary policy tools for the central bank. Now, the central bank can conduct its monetary policy, not through a complicated sort of scheme of purchasing and selling certain financial assets with vis-à-vis certain band of large financial institutions, the way it's done, for example, in the US right now, very indirectly, but literally directly by establishing, for example, the interest rate on the deposit accounts that everybody holds. Directly at the Fed or Directly Bank of England and can also simplify other government functions, for example, various social safety net payments can now directly be credited to these accounts that rather than waiting for certain checks to go through the system. I don't know about the UK, but in the United States that actually still surprisingly and embarrassingly is a technical problem. So that is the liability side, but the asset side is the more interesting side. This is where you can actually achieve the greater degree of democratising finance by making the financial system serve the interests of the real economy and the real people. And that is precisely the key issue that doesn't get addressed in any of the current CBDC mainstream discussions doesn't get addressed directly because this is where you can see the allocative, the distributional consequences of how we choose to construct or allow the central bank to construct its balance sheet because this is where the politics of central banking and politics of finance becomes most clearly transparent, most clearly visible. So currently on the asset side of the Fed, for example, but also the Bank of England, the key assets are the reserve accounts that banks, the money creating private banks have because this is how they are able to create private liabilities that circulate the sovereign money. So reserve accounts of banks are a huge sort of it's a liability. It's a liability of it's a liability of the central bank, of course, but on the asset side, what happens is that a lot of the money central banks are channeling into, let's say, certain government issued liabilities like the treasury bonds, for instance. And some of the assets are increasingly, at least in the US, are the various other financial instruments that were bought as either part of a quantitative easing or as part of some other crisis time kind of rescue rescue mission by the Fed. And so instead, what we could do, for example, is to create new asset classes that built on the existing asset classes. So I proposed in my paper three such asset classes. The first one is to expand the discount window loans that currently, for example, the Federal Reserve provides this short term, relatively short term, liquidity loans to banks that hold reserve accounts at the Fed to help them overcome certain liquidity shortages. And at this point, those discount window loans are stigmatized because they viewed as this kind of admission by a bank that they cannot raise money in the interbank lending market. So banks try not to borrow money from the Fed. But if all the deposit funding that currently banks enjoy is dried up because the deposits are now directly sitting on the Fed's or Bank of England's balance sheet, right? So how do you replace the cheap or the publicly subsidized funding for the lending institutions formerly known as banks so they can actually keep lending into the real economy? So discount window on the asset side of the Fed's balance sheet can actually perform that role. So the Federal Reserve can basically establish criteria for eligibility of the entities that can access that discount window and the eligibility of the collateral. So if certain banks, for example, want to, if a bank wants to extend the loan to some kind of a, I don't know, car manufacturing company somewhere in the Midwest of the United States or somewhere in the industrial regions of the UK, right? There is a new new factories being built and the loan is needed. That particular bank can basically negotiate that loan and assess the credit worthiness of the borough price that loan knowing that it can turn around and bring that loan to essentially discount that loan to the Federal Reserve or to the Bank of England, where if that loan meets the eligibility for the credit underwriting, the quality and so on and so forth, the Fed or the Bank of England basically will essentially extend a discount loan to that bank so that bank can actually finance that type of credit asset. But for example, if a bank wants to finance some kind of a margin loan to a speculative financial trader, that kind of a loan may not be eligible for discount the Fed's or Bank of England's discount window because that is not the kind of a credit allocation that the central bank really properly should be interested in prioritising, for example. That is not to say that that loan will not be able of being made. That bank can still fund that loan if that's what they choose to do. But they won't be able to finance that loan by getting an attractive long term interest rate at the discount window at the Fed. They will have to finance that loan by basically going to the shareholders or to the bond holders in private capital markets and then rely on the discipline of the private market. So the second, very quickly, the second asset class that could be put on the Fed's or Bank of England's balance sheet would be new public issuances, for example, instead of buying US Treasury notes or bonds, the Fed could actually now start buying bonds and other financial instruments issued by state level green banks or state level public infrastructure, public banks, or even by new federally in the United States, federally created public investment institutions whose mission is to channel credit, public and private credit, into critical public infrastructure projects that currently do not get financed in private markets. Right now, a lot of that kind of financing is impossible simply because we cannot do it through the fiscal channels and the private markets are not willing to do it, but if the Fed has now capacity on the asset side to maintain secondary markets or even to extend, for example, open credit lines, revolving credit lines to this type of new institutions of public investment, then we can create such new institutions of public investment to support this new system of public and public private finance. So in the United States, I made a proposal for creating the national investment authority that would perform that kind of economic policy, industrial policy function in the UK. There is, I guess, the infrastructure bank in the UK. So those kinds of those kinds of institutions will actually now be able to plug into the central banks, newly expanded asset side capacity to really funnel money into structurally balanced, socially inclusive, sustainable economic growth of the kind and scale that is impossible today. And finally, a smaller proportion of the central banks assets could consist of the so-called systemic stabilization portfolio, let's say a trading financial asset portfolio that the Fed or Bank of England will maintain not as a means of quantitative easing, but basically as a means of continuously trading, dealing in financial markets for purposes of dampening this boom and bust cycles. In other words, the Fed will be watching, for example, that certain type of financial asset is heating up and there is clearly a bubble heating up there so the Fed could go into that market and, for example, short that asset, sending the signal to all the speculators that the Fed is watching it and dampening the incentive to continue creating that kind of destabilizing spiral. So again, just to just a couple of words, how will it democratize finance, right? On its face, all I've been talking about was kind of the technocratic changes to the liability side and the asset side of the central bank. But the reality of it is that if we actually change how the Fed views its mandate, which is essentially to maintain long run growth of monitor and credit aggregates that is commensurate with the economy's long run productive potential by actually making it responsible for the creation of fully sovereign money and also helping it to channel this newly created sovereign credit money into productive economic enterprise. We can actually enable the central bank to perform its mission in an integrated manner without being caught in this artificial trade off between promoting employment generating growth on the one hand and insuring price stability or financial stability on the other hand. This is what we're seeing today. It seems like some kind of trade off and it doesn't have to be. We need to think of democratizing finance or democratizing central banking, not simply as a matter of access, but as a matter of making public money serve the interests of the public. And for that, we need an institutional basis. Thank you. Thank you so much, Soleil. That was amazing and and you know, gives us a strong sense of the opportunities that this presents, but also the risk if the public don't push for this to really serve the public and be about a structural shift in our financial system. So I'm now going to hand over to my colleague, Simon, to present. I'll do a brief introduction to Simon. Simon's head of policy and advocacy at Positive Money, where he's worked for the last six years, pushing for a money and banking system that serves people and planet over private profit. He's now going to present the UK context and the opportunities that a digital pound brings over to you, Simon. Thanks, Rachel, and thanks, Soleil, for an amazing presentation. I hope everyone can see my screen, my slides. Great. I'll try and be quick. So it would be great if the host could let me know when I've taken five minutes on keen for us to get to questions and answers. I'm sure everyone has lots of questions. So to start, why does Positive Money care about a digital pound? So this is a question we often get. And the answer is we've been calling for a digital pound since at least 2016. And the reason why is because us supporters of Positive Money know that our monetary system is essentially mostly privatised, only banks can create electronic money which is accessible for the public when they make loans. And with the decline of cash, we're seeing even less publicly available money. So this means if we want to make electronic payments, we need to rely on the banks currently and has been explored already that's not the most sustainable basis with boom and bust. So this central bank digital currency, digital pound will allow people to access direct public money digitally. And this is because as a soul has talked about, lead to better policy as well. You instead of doing quantitative easing where you just throw hundreds of billions of pounds into financial markets, you could direct money to people directly and you can even pay higher interest rates directly on digital pound accounts. And I guess to summarise, it's really a way of, you know, a way in which we've kind of evolved our sovereign money proposals. So we feel like it's a route towards the more democratic control over the money and banking system that we've always been calling for. So as Saul talked about, it'd be a way of controlling banks' ability to create credit for socially and environmentally harmful purposes. So it would give the public more control over investment. A big factor as well is seniorage, which is a fancy way of saying the profits from creating money. So as the new economics foundation Estimates in 2017, banks gain billions of pounds a year from seniorage. This has been increasing massively over recent years, particularly if the decline of cash means where we're transferring more of those profits over to private banks. So the new economics foundation calculates that if 30% of our money was an additional pound, the government would have saved 182 billion pounds in less than 20 years on what the amount that spends on its debt payments, which is about 1.8% of annual government spending. And those figures are likely much higher today with higher interest rates. So another simple bonus for additional pound is it would essentially enable much more spending on the things we need, you know, public services and investment. So in terms of how it would actually work in the UK, under the Bank of England's platform model, they're considering. So it would be a kind of direct CBDC model that Saul talked about. So just like banks, households and businesses would be able to access fully safe central bank digital money, central central bank money with accounts at the Bank of England. So all these funds would be kept at the Bank of England. The access, however, won't be provided by the bank itself. It will be provided by payment interface providers. So you won't have a direct kind of relationship with the Bank of England. And important to note that the Bank of England or the government won't be able to see any anonymized, sorry, any personal info. They'll only see anonymized transaction data, so they won't be able to track what you're spending individually. And I think it's also important to note because there's lots of conspiracies theories around about it. It won't be programmable so the government won't be able to programme it to stop you spending on things they don't want you to. Yeah, the only way in which it might be programmable is that people can have control over what programmability they'd like for their money. In the same way, you can set up a direct debit, right? So it's in the hands of the user. So while we've supported a central bank digital currency for a digital pound for a number of years, we think there are some issues with the current approach just described. So first is this reliance on the private sector. So as mentioned, you'll have to get a private payment service provider to give you access to digital pounds. And we know the private sector can't be relied on to ensure inclusive and fair services so we could see a reinforcing of the barriers we have in the private current system for financial inclusion. And there's a question of how they'll make profits from it. Would they charge fees for users or monetised data? And as Sula has been talking about as well, is an issue that it's been designed in a way which try and protects the existing financial system. So Bank of England is currently proposing their limits on how much people can hold and saying that it won't bear interest because their worry is that if too many people move away from private bank money into digital pounds, banks will lose their sources of funding. But as Sula has talked about, there are things we can do to prevent that being an issue. And lastly, it's not necessarily true digital cash as unlike the notes and coins in your pocket, which are a true bear instrument. You don't need a bank account or anything or any personal details to use it. The digital pound model put forward will be linked to an account and that account will be used to authorise transactions. So we argue that they should have a more kind of decentralised version, a true bear instrument, which allows transactions to be settled, peer to peer, like with cash, you essentially just hand over the monetary instrument to the person you're paying, don't need ID for this, so it can be fully anonymous for smaller transactions and it can even be fully offline through secured hardware. And we think there should be, as Sula talked about, like a social public payment system and banking option, rather than relying on the big banks to provide it, we should have access to both physical and digital cash through something like the post office, which is publicly owned and has a social mission, so we can have a post office in every community, which will be able to provide those services. And this could be funded by the senior rich, we talked about the profits of making money or by taxes on big finance of tech and the adoption of a digital pound, as Sula talked about, would mean the Bank of England would be expanding its liabilities, but also on the asset side, it could be as Sula talked about investing in something like a green new deal or productive investment in our nation's future. So it was a real opportunity to say it as well. And just quickly, I'm keen to get questions, we also need to think about as Sula talked about what society would look like about a digital pound. It seems like digital currencies maybe inevitable from a private sector. And, yeah, there's the prospect of Facebook's DM or Librecoin, which, you know, really raised alarms when it seemed like they were trying to issue money. So I would also argue that a digital pound is important as like a public option to protect against private money. Yeah, you know, kind of dystopian future. So I'll leave it there because I'm keen for us to get the questions. But thanks everyone. Thank you so much, Simon. That was very, very useful indeed. We're now going to move to a Q&A. Lots of people have submitted questions for the panel ahead of the event. So we're going to kick off with some of them. And we'll try to take some of the questions coming in in the Q&A section as well. We're doing our best to organise them into themes and make sure we cover the most important basis. So to kick off, Sola, I think this is this is one that would be good to put to you. What can we do to ensure that private banks don't simply become intermediaries for the digital pound and charge people fees to use it? And is there a risk a digital pound would put banks out of business? Well, this is this is precisely the crux of the issue, right? So it depends on how you design it. It's not that by fully migrating deposits to the central banks balance sheet, somehow you kill all private financial institutions. It's just the banks will not be doing exactly the same thing they're doing now, but that doesn't mean they won't be able to pursue privately profitable lending opportunities because ostensibly the reason why we need banks, right? This is how they justify always. They justify the subsidies and their regulatory push by saying if you over regulate us or you take away this benefit from us or that benefit from us, then they will not be credit flowing into the economy. So we can just give them that opportunity to continue lending, but under a different set of terms, the bargain, the public private bargain will change. And that's how I see it. And that's the important key is to change the bargain at its core, meaning that all sovereign money is created by the sovereign. The lending is done by private institutions and public institutions with the support of the central bank, but that is a whole different structure. Thank you, Simon. Is there anything you want to add there or should we move on? No, I think that was a good answer. Sorry, I'm just reading the chat and interested in all the comments about programmable money and things like that. It's amazing how much engagement there is on the chat, and it's so cool to see how many people have joined us and from all parts of the world, from Finland to Canada to the US, the Netherlands, all over the UK. It's great. Thank you for that, Solu. I'll move on now to a question about privacy. So who would be able to access my information when I use the digital pound? Would the government or corporations have more power over our money in comparison to the bank accounts we already use? What's the best way to protect our right to privacy? Simon, I could see you. I'm happy to start with that one. So, yeah, a good point that it was worth talking about how the current system isn't fully private and anonymous by any means. So if you use a private bank account, your data will be collected by not only the bank, but also payment firms and any intermediaries and also anyone else they want to sell the data to. And the government can also routinely, and as they do, access that data if they really wanted terrorism and other kind of legal purposes, law enforcement. So I think under the current model put forward by the Bank of England, it is at least as private as private bank money in that, as mentioned, the government or the Bank of England won't see personal data. They will see anonymized general data, aggregate data, which they will use for maintaining the system. It will be up for the intermediary, like the post office in our view, to provide that kind of KYC, know your customer and your money laundering function. So the Bank of England or the government won't be surveilling that any more than they would under the current system. However, we think there's even scope for it to go further in terms of privacy. As mentioned, if we have a kind of bear instrument version of digital cash, that would allow almost fully anonymous transactions. So you could, for instance, have a show in the presentation, you could have a kind of card which you've downloaded digital money onto. It's not connected to any account, but it allows you to settle transactions without any data on the user being transferred. So, yeah, for small transactions, there will probably have to be limits on this to avoid financial crime, but it would basically give you functionally the same amount of privacy as cash, as it would be offline, not connected to any database which has any personal information and would would would be able to be peer to peer settled without any intermediaries. So that's one thing we're calling for, which we think would help actually improve privacy in the digital economy. Thank you, Simon. So, is there anything to add there or should we take another question? Well, just very quickly, right? It's kind of interesting because when we talk about private financial institutions or private money providers, the underlying baseline assumption is that they're allowed to do anything, including with your private data, that is not explicitly prohibited by law. Whereas when you're talking about public actors, it's a very different, it's the opposite assumption. They're only allowed to do with your data what we will allow them to do by law. And that gives us a chance to craft the kinds of privacy protections institutionally, in addition to technological solutions, that we simply do not have that power to craft those types of solutions if we just allow private institutions to create money. Thank you, Soler. And that that links us to a question that's come in on the Q&A during the webinar, which is how can more democratic participation and more democratic control be built into the new digital central bank currency? So this is the this is the trillion dollar question, my friends, because it's a very complicated issue, right? Like, what is democratic control? We don't really live in the era of direct democracy. And to me, democratic control is sort of it's a dynamic process, right? Once we start changing the infrastructure through which money, financial resources flows and flow and get allocated, right? We will change the distribution of power, political power in the society. And that is a fundamental shift that then will empower certain groups that currently are not empowered to participate through various channels in the in the politics decision making in ways we cannot envision today. So I would say that we need to win first the design, the design game with the CBDC, right? Keeping that bigger sort of long game in mind that why we're doing this is to change the politics of how we run our society. But it's very hard to tell right now, oh, we need to add this type of, I don't know, voting or public feedback procedure, that type of public feedback procedure. I think we just need to shift functions to public institutions more than to private institutions. Yeah, and to echo that, I think in the design of it, it should be made more kind of public and democratic because as people, I think noted already, the consultation so far is very inaccessible. Very few people from the actual general public are going to contribute. We probably may need to be people either like me who are really in favour of it or lobbyists who are very much against it. So we need to think about how we could have a genuinely inclusive conversation about the nature of money, the future of money, you know, who issues it, who benefits from it. And I think, you know, that should be part of this process. This is the opportunity. And one thing we've talked about is, you know, whether we could have like citizens assemblies to kind of discuss to make a decision on, you know, how the design works so it isn't just decided by vested interests. So we get genuine public representation in it. And I also think, you know, as all those presentation talked about, that for me, there's on like the kind of asset investment side, there's huge opportunity for a democratised system, right? So one, the kind of vision I like is having like decentralized banking system, you know, where, you know, banks and local communities would be able to essentially obtain funding via the kind of central bank, which has all of these, you know, liabilities from the CBDC, which can then be used to channel investment into these local banks, which can then invest in the real economy. And you could even have, you know, public, you know, local or regional banks as well, which elected politicians or other kind of public groups could be in charge of deciding what it invests in. So, yeah, I really think there's a huge opportunity to democratise the system, but there's like a lot of debate to be had to get there. Absolutely. And it feels really important that when we are given an opportunity like we've got at the moment to email the government's consultation in the UK that we make the points of both how we think this should be designed in the public interest, but also that right now there's a huge democratic deficit in the way that this debate is happening and the decisions are being made. And we need to push for much deeper public education awareness and empowerment around how we shape this. And as Simon said, something we have suggested to the Treasury and Bank of England teams is that they consider running a citizens assembly on this because it's a massive issue that has massive potential to reshape and redesign our economy in ways that we desperately need with the huge inequality and climate change and democratic deficits that we're seeing at the moment. And so I'll move this on to another question. This one is about inclusion. And just before I ask it, I'll just say that we know that, Soler, you might have to jump off to another meeting at some point soon. So when you do, we'll just want to say a huge, huge thank you for joining us today and bringing all of your knowledge to this audience. It's fantastic that we can kick off this debate. Thank you so much, Rachel, Simon, everybody. I actually do have to jump off, but you know, good luck, good luck. We academics really need you guys in the trenches and all the best. Thank you so much. Bye bye. Thank you, Soler, all the best. Thank you, Soler. We're going to carry on with more questions for the next five minutes or so before we then jump in to supporting people on the call to respond to the government consultation. And we've tried to make it as easy as possible, so it really won't take people very long at all. But yes, back to some questions. So this one, which came in ahead of the webinar, will people who are excluded from having a bank account be able to use the digital pound? What support could be made available to help more people to use it? Will it be free to use like cash? Yeah, so definitely we think an issue with the current approach is that it might, as I say, reinforce the current barriers to the financial system, right? If people need to be able to have a bank account or need to have idea of some sort to access it, that would be a huge barrier for a lot of people. So, you know, not only for privacy reasons, but also for financial inclusion reasons. That's why we're keen on having, you know, this kind of bearer instrument version where anyone can just walk into a shop and buy, you know, this card or device. It could be like something that stick a sticker on, which goes on to a SIM card or like a phob or something like that, which would enable them to be able to use and participate in the digital economy. So as well as having cash, this should also be an option as well to allow cash-like digital payments. And in terms of how this could be funded and how it could be free. So I've talked about the seniorage, so the profits from making money can quite easily fund this, it will probably be billions of pounds a year. And one option you can quite simply ensure that the costs, all you'd need to do is ensure that the costs of manufacturing a digital pound device is less than the money loaded on it. So, for instance, if I pay £20 to buy a digital pound device of £20 worth a digital pound on, if that covers the cost of the manufacturing, that's essentially free through seniorage. So, yeah, kind of a complicated concept, but once you've got your head around it, you can realise actually this can be provided or free of charge. Or, you know, if needs be, it could be funded through, you know, taxes on the banks or big tech who would otherwise benefit. Yeah, I think that was it. Thanks, Simon. That's great. A question now about protecting cash. So do we think that the government wants to get rid of cash and how can we make sure that a digital pound does not end up replacing cash? Yeah, absolutely. This is a key issue that we think about. And I think I would first say that the government to that credit has talked a big game about protecting access to cash because they know that people care about it, right? You know, whenever there's been a campaign, whenever chances have even talked about getting rid of one piece or two piece. And there's been a huge public backlash, which has made them, you know, U-turn. So I think as long as we keep making that case, the government, you know, hopefully won't get rid of it. And I don't think they necessarily want to get rid of cash because, as I say, cash, if I was a government, I would quite like having cash as something which generates seniorage revenue for the government. But, yeah, there was also the risks. There's always a risk that they'll, you know, as as often seems to be the case, follow the lobbyists from the banks and the payment companies and the tech companies and, yeah, not be strong enough in protecting access to cash and ability to use cash. I think in particular we should be in favour of changing a law so that cash usage is mandated as in people should have the right to use cash, the pay of cash and, yeah, that will hopefully protect the system. But also I think as talked about earlier, I'd like to think that actually the digital pound would be a way of saving physical cash as well in that we can use the digital cash network to support the physical cash network and we could use the funds from the digital cash network to support that. So if we had these post banks that we like the idea of, they could provide both access to digital cash and physical cash. So in some way you can say that the access to digital cash would subsidise existing access to physical cash because, yeah, for me, that's just as important. Thanks so much, Simon. I think the kind of last like broad theme that's coming in on the questions is is about the kind how how we propose to publicise and generate more interest in these ideas and how we can get this information out to a wider audience. Because as some as David has said in the Q&A, this feels like years from being democratic currently. And it could be a very important issue that perhaps less than one percent of the population understand. And so and Rob has also asked, you know, is this issue fully understood by all those organisations that push for greater democratic processes? Because the fact that money credit card money is private money and public digital currency could be a way of essentially democratising the money system feels really important. And so perhaps to kind of wrap up the Q&A, Simon and I, we could just try and speak to that a little bit and I've got a few thoughts, but would you like to to kick off Simon? I mean, I think you'll be even better answer to me. I think we've got to continue educating the public. I think, yeah, you know, as famously positive money did polling of only 15% of MPs understand our monetary system and how banks create money. So I think what we we should definitely be doing is continuing not only events like these, which are like quite technical, might not be for everyone, but also trying to reach audiences with different issues as well. And yeah, I'd be keen in people's ideas of what other kind of events we could do. But yeah, I think our job with positive money is also to educate the politicians and the policy makers. And yeah, we'll continue to do that. But yeah, I'd be keen to hear your thoughts about Rachel. Yeah, I think there's a few key things. I think one thing is how we frame this issue. And I think what Soleil was talking about as, you know, this is this is an issue of this is a political issue and an issue of control. And that feels very important and and kind of something that's very right for the public at the moment. So we we're working with framing experts and we're we're testing how how we can talk about this issue in the way that makes most sense and gains most interest from people and we're pushing the Bank of England and the Treasury to consider how to how to involve the public in a much more active way in this debate. You know, they need to do much more public educational outreach activities across the country and to help people learn what a digital plan is to help shape it and to help them prepare for how it how it might change their lives. But as we've said, we're also pushing them to do much deeper forms of public engagement and we think the idea of a citizens assembly should be something they should really consider. And just on this consultation, we're trying to get as many people as we can reach across all of our platforms to respond to it. We're submitting our own evidence response to the consultation as positive money. We've also encouraged and supported other civil society groups to do that. And last month, we organised a round table at the Treasury where we brought in lots of different civil society groups with the Bank of England and Treasury teams who are looking at this. So we've got we've got positive relationships there and we're doing what we can. But it certainly feels that there's lots of crossovers between the economic inequalities we're seeing, the harm that's happening to the planet and how decisions are being made. And so increasingly, it feels important for organisations like ourselves to be making both those both raising both those issues at the same time. OK, I am going to move us on to the final section of this webinar. Simon, thank you so much for your presentation and for answering all the questions and there might be a couple more yet as we move into the to responding to the consultation. And so we've done our best to make it as easy as possible for any member of the public to respond to the consultation. And we really hope you can stay with us for this final 10, 15 minutes. Taking collective action together feels really important and powerful. And so this is a really important section of the webinar. Because as we've heard at the moment, we think there's a risk that the government's approach to the digital pound is too focused on private firms and not enough on involving the public. And there's a big risk that they're going to choose to design the digital pound with these private interests in mind and not the publics and not the huge opportunities that we've got to restructure the financial system. So that's why we need as many of us as possible to respond to the consultation. So I'm now going to share my screen again as we go through the presentation. If there are any questions, please feel free to share them in the Q&A as we go. And we will do our best to answer them. This is specifically on responding to the consultation. So I'm just going to share my screen. So as you can see, there are three ways to respond to the government's consultation. One is via the survey on the Bank of England's website itself. As someone's alluded to, this has got 18 questions and I wouldn't be able to answer them without a lot of support. You don't need to answer everyone, but you can do that if you want. The second option is simply to send an email to this email address. We're going to send you all the links to this shortly. But the third option is what we're going to encourage today is for you to respond via the positive money's dedicated web page. So that looks something like this and my colleagues are going to post a link to that in the chat now. And I'm just going to walk you through how to do it. And as you'll see, you can literally do it in one minute, maybe two minutes, if you wish. So. If you click on the link in the chat, you'll come to this. It says Action Network at the top of the URL. And you will land on a page that looks a little bit like this. On the right hand side, you put in your address. It already knows it's me because I've done a few positive money actions in my time. And all you have to do is fill in your name and your email address. And then you click on Start Writing. That landing page gives you a bit of introduction. And then you should land on a page that looks a bit like this. See that. Basically, what we've done is is put a template response into this box. And it says Send Letter, but it really means Send an email. And this is set up so that when you click Send Letter, it will literally send your response to that email address I showed you on the on the slide before, which is the consultation email address. And what we'd say is that we'd really encourage you to make this personal to edit this letter as you wish. And there's absolutely no pressure for you to to submit what positive money is drafted here, but we've simply done it to give people a head start and raise the issues that we think are most important. So I'm actually going to do it now. I might edit the subject line. So I could say something like that and what's important is that when I scroll through, there are three key points that we make and I'm going to show you these on a slide in a second. And the only other thing to do is just to add your name at the bottom. And I'm going to send that letter because I haven't sent mine yet. And then your land on a page invites you in this area. But I'm going to take us back to. The slides now. And. This will just give a little recap of what I've just done. So. We're going to suggest that once we finish the call tonight, people respond in your own time to the consultation. It shouldn't take long. Or you've got until 11.59 p.m. on Friday to submit your response. So you can click the link in the chat, input your details, then edit the template email as you wish and hit send. And that is it. These are the three key points that we think are particularly important to make and are the three points that we've made in the template email. So firstly, the public good benefits of any digital pound should not be sacrificed to protect the current business models and profit making by big banks. Secondly, a digital pound should offer the highest level of privacy. And thirdly, a digital pound should be fully inclusive and accessible via a free public option. So all there is left to say there is really good luck. And and we hope that that everyone is able to do it. I'm just going to check now any questions we've had come through on this and make sure that we've answered the questions as best we can. Rob has asked if you can't remember if you sent on before what happens if you repeat it. I doubt you'd be busted, Rob. I think it's better to err on the side of caution and submit submit to that's absolutely fine. That's great, Mick, that you've already responded. That's all the questions that have come in. Em. Are we asking you to write to your MP to ask them to do the same? That's not something we've done on this occasion, Rob. It is something we've we've done in the past. And this consultation that that's being run at the moment certainly won't be the last opportunity. But what we're trying to do at the moment is focus on enabling the public to respond. But it's a really good question. Thank you for raising it. You know, I would add on that. Hopefully there'll be a vote in Parliament at some point on it. So I imagine when that comes, we'll definitely want people to email their MPs and get their MPs to to engage with it. But otherwise, yeah, it could be something worth mentioning or writing to your MP about. And if you get in touch with us, we'd be happy to help with that. Thank you, Simon. And yes, absolutely. I think talking to MPs about it is is fantastic. And if we are always encouraging people to actually meet with MPs and we might well have a general election in the not too distant future. And new MPs is a really good opportunity to try and to a time when MPs are just starting in the job is a good time to to try and set up a meeting and, you know, join join one of their sessions so that you can raise this issue. OK, I'm just going to stop the screen for a second. And just double check that we've answered all the questions that we can. And yeah, I think we have. So, Simon, is there anything final from you? You'd like to say before I give a final few words? No, I mean, thank you so much, everyone, for coming out. And all of the questions have been really interesting. And I love to spend more time answering them all. Yeah, given we haven't got much time, probably I can't get through them all now. But if you do want to contact me, I think you should be able to find my email address and I'd be happy to chat more. Yeah, because there's so much to cover in this issue when I may not have been able to cover everything. But yeah, especially if people have questions. Related to do anything else to expel. Yes, and we'd like to also share with everyone a couple of more key links. So there is, Zach has just shared that in the chat. There's a blog that Simon drafted, Simon wrote rather. And Soler's paper on the people's ledger that she referenced is also there in the chat. The final things for us to say are simply thank you so much for joining us today. It's it's fantastic to see the range of interest and engagement on this topic. And we're really hoping to be able to drum up a lot more of that in the next couple of years in particular. Thank you so much, Simon, for your presentation and your dedication to this topic and to Soler, who's who's left us now. But I'm sure everyone was thrilled as we were to have her on the call. And any feedback to us is really welcome. And so please email us via the contact us page on our website to let us know what you thought of this webinar and what you might find useful in the future or you think needs to happen. And if you haven't already, do sign up to our mailing list and to follow us on various social platforms. We also have a network of local groups around the UK who meet up to discuss issues like these, and so that's something you could check out on our website as well if you're not already involved. And please don't forget to answer the consultation this evening or before Friday. And we will post the links, the key links to that in the chat again. And both to our website, the web page there that will talk you through it and to the actual Bank of England and Treasury page as well, where they actually introduce the consultation and give their key links. But we hope everyone's enjoyed that. Thank you so much for joining us and have a lovely evening. Bye, everyone. Thank you.