Designing digital money for a fragmented world

Written by Christopher Woolard, Chair, EY Global Regulatory Network

For much of the past decade, digital money has been discussed as a technology story. The focus has been on blockchains, programmability and faster settlement. Today, those capabilities are assumed. Increasingly, public policy choices will determine whether digital money scales. States are making explicit choices about what role digital money should play in their financial systems, how much risk they’re prepared to tolerate and which institutions they trust to deliver it. Questions of sovereignty, competitiveness and financial stability have moved to the centre of the debate.

This shift has important consequences. It means the future of digital money will not be determined by a single global model, pure commercial rivalry, nor by an assumption that regulatory differences will narrow over time. Instead, national and regional approaches are becoming more distinct - and more deliberate.

Convergence in principle, divergence in practice

At a high level, there is a degree of convergence on fami…