Bank governor to back Facebook cryptocurrency as part of digital-focused vision

Bank of England Governor Mark Carney is to give a thumbs up to Facebook and hail a “new economy” built on digital payments, in his annual Mansion House speech.

The departing governor will laud the potential of Facebook’s new cryptocurrency as part of his speech before leading City figures outlining the future of a digital-focused “new Bank of England”.

Mr Carney will also announce plans to put new digital banking start-ups on a level footing with the big commercial banks, to “reduce reliance on major banks”.

The Bank of England will consult on opening access to its balance sheet to new payment providers, allowing these firms to hold funds on its balance sheet.

Giving a boost to these challenger banks can “improve inclusion and services” for UK households and businesses, Mr Carney will say on Thursday night.

The governor, who reportedly met with Facebook-founder Mark Zuckerberg in April, will highlight the potential for transformation in retail payments, driven by the likes of Facebook’s new Libra payment platform.

He will say: “As designed, Libra may substantially improve financial inclusion and dramatically lower the costs of domestic and cross-border payments.

“The Bank of England approaches Libra with an open mind but not an open door.”

Mr Carney’s calls come in response to the publication of Huw van Steenis’s nine-month review into the future of the UK financial system, which the governor announced in his 2018 speech.

The Bank of England will also help to press for an “open platform” for small business lending, to help plug the £22 billion SME funding gap in the UK.

His speech will see Mr Carney once again push the bank’s green credentials, calling for changes to the country’s finance systems which will “smooth the transition to a carbon-neutral economy”.

He will call for it to become mandatory for companies to disclose their climate-related financial risks.

Increased disclosure will be “critical” to driving forward market standards over the coming years, Mr Carney will say.

In his speech, he will also say: “Firms that align their business models to the transition to a carbon-neutral economy will be rewarded handsomely; those that fail to adapt will cease to exist.”

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