B2. Andrew Bailey, Governor of Bank of England speaking at a Speakers for Schools webinar for students on 13 July 2020, said 'We are looking at the question of, should we create a Bank of England digital currency, we'll go on looking at it, as it does have huge implications on the nature of payments and society ...I think in a few years time, we will be heading toward some sort of digital currency.' (a) Discuss the opportunities and risks that a central bank digital currency (CBDC) would present the Bank of England with in achieving its objectives. [20 marks] (b) What would be the impact of CBDC issued by Bank of England on the stability of commercial banks deposit funding? [10 marks] (c) In your view, should the Bank of England be the sole provider of the CBDC system including user facing services? Justify your answer. [5 marks]