The Bank of England's executive director for financial market infrastructure, Sasha Mills, is pushing for the use of onchain central bank money in wholesale markets. The shift, she argues, could deliver efficiency gains and sharpen regulatory clarity for institutions that trade at scale.
Why onchain money matters in wholesale
Mills made the case during a recent speech, though the central bank has not yet announced any formal policy change. Her argument centers on the idea that moving central bank reserves onto a distributed ledger—letting them function as tokenized cash—could streamline settlement and reduce friction in markets that handle trillions of pounds in daily flows.
Wholesale markets today rely on layers of intermediaries and batch-processing systems that settle at fixed times. Onchain central bank money, Mills contends, would allow near-instant settlement, cut counterparty risk, and give regulators a transparent ledger to oversee transactions.
Efficiency and regulatory clarity
The two benefits she highlighted go hand in hand. Faster settlement means less capital tied up in collateral and fewer delays. On the regulatory side, an onchain record could give supervisors a real-time view of who owes what to whom, making it easier to spot trouble before it spreads.
Mills did not offer a timeline or a specific technical blueprint. The Bank of England has previously explored tokenization through projects like the less-known 'Project Meridian' but has not committed to live issuance of digital central bank money for wholesale use.
What this means for the broader push
Her comments come as central banks around the world grapple with whether and how to adopt blockchain technology. Some, like the People's Bank of China, have already launched retail digital currencies. Others, including the European Central Bank and the Bank for International Settlements, are testing wholesale versions. The Bank of England's stance—cautious but now openly debating onchain wholesale money—signals that London wants to stay in the conversation.
The City of London's role as a global financial hub means any shift in how the central bank handles wholesale payments will ripple through banks, clearinghouses, and asset managers. A move toward onchain money could also affect how private stablecoins and tokenised deposits compete with state-issued digital cash.
Mills stopped short of endorsing a specific technology or a launch date. The next step, she implied, is further experimentation and consultation. For market participants watching the Bank of England, the takeaway is clear: the door to onchain wholesale central bank money is open, but the path inside is still being mapped.
