In a speech delivered at a G30 seminar in Washinton, Baily says there is a strong need to modernise key payment practices for both domestic and cross-border payments, and wholesale and retail. In doing so, banks must look to digital technology as an enabler as to do otherwise would risk "a failure of imagination" he says.While Bailey believes that commercial banks are the "best home" for innovation in retail CBDCs, he fears that banks are dragging their feat. "For me, this justifies why we must continue to prepare for retail CBDC," he states. "We have not yet seen enough evidence that the innovation will happen in commercial banks. As central banks, we should be thoroughly engaged to encourage, and if necessary, provide such innovation."Bailey argues that the medium of exchange - the payment rails - have developed in ways that have stymied incentives to innovate including, on occasion, due to concentrations of market power. "It is important that these structural factors not stand in the way of innovation," he continues. "For commercial bank money to function effectively, it must keep pace with the needs of its users. Our work on retail CBDC is considering these trends in the payments landscape closely. Absent innovation in commercial bank money, central banks may be left as the only game in town insofar as retail payments innovation is concerned. That is not my preferred outcome, but not one that we should rule out."