There’s no doubt that monetary policy has unintended consequences, however these are likely small, partly because they are working in opposite directions. For example, loose monetary policy may well increase e ployment opportunities which benefit the unemployed and the least well off. It at the same time raises asset prices, more so if it involves quantitative easing.

It can be both beneficial and harmful for the reasons alluded to in the literature that you cite. It is hard to imagine a topology in which central banks displace financial intermediaries, although I agree with Haldane that in that world banking crises can be avoided. The reason is that without fractional reserve banking, we lose the inherent instability due to bank runs, but we also lose financial intermediation provided by the banks, which helps address all kinds of imperfect information problems in finance. Thus, it is not at all obvious that abandoning fractional reserve banking is in the public interest - indeed the Diamond Dubvig model shows that financial intermediation can help achieve the Pareto optimal allocation, as long as we can prevent bank runs from occurring (which explains lender of last resort and deposit insurance). If CBDC is introduced by BoE and indeed other CBs, it will likely be through financial intermediaries providing the interface, as central banks in general should not be aiming to displace intermediaries by taking deposits directly from the public. It will also likely come with relatively low limits, e.g. no higher than deposit insurance limits to prevent unfair competition with commercial banks. Additionally, there will have to be strict anti money laundering (AML) checks - something that the economic literature has not addressed. It is inconceivable that CBDC end up facilitating money laundering - which unregulated digital currencies often do.the reputation risks are so high that central banks should do everything possible to prevent it - which means there have to be identity checks at least at the entry point. A lot of work needs to be done to study CDBC by central banks considering introducing them, given the opportunities, challenges and risks. The outcome of this process in my view is that B digital currencies, if and when introduced, will be well regulated and will not constitute a AJ or source of competition to commercial banks. As such, their impact will be limited but on balance somewhat beneficial. Otherwise, they will not be introduced!