Let me elaborate on the role of innovation for each of these tasks beginning with the third one – promoting a safe and efficient payments system. A safe and efficient payments system has two parts: the cash system and the noncash system. The role of the central bank in the cash system is to issue and bring into circulation bank notes and coins.
Innovation plays a major role in the design and composition of bank notes. Security features to minimize counterfeiting are constantly evolving. Also the materials of which bank notes are made are evolving to prolong durability and, hence, reduce the cost per note.