(1) Banknote regulations must require authorised banks to have backing assets.
(2) "Backing assets" means assets of a kind specified by banknote regulations; and the regulations may, in particular, specify -
(a) banknotes issued by the Bank of England,
(b) current coins of the United Kingdom, and
(c) funds in a specified kind of account held with the Bank of England or with another specified institution or class of institution.
(3) The regulations must -
(a) require banknote rules to include provision for determining the value of backing assets to be held,
(b) require backing assets in the form of banknotes to be held either -
(i) by the Bank of England, or
(ii) at one or more locations approved by the Bank of England, and
(c) require backing assets held in the form of coins to be held at one or more locations approved by the Bank of England.
(4) The regulations may make other provision about backing assets; including, in particular -
(a) provision requiring a proportion of a bank's ba
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