1 / Why: incorporating digital innovations is an imperative I shall sum up some very strong trends as a “triangle of risks”:  First, on retail payments, over the last 18 months, cash has accelerated its decline while the share of dematerialised payments has increased twice as fast as before the crisis, from 51 % in 2019 to 70 % in the first half of 2021. There is also a strong shift towards the tokenisation of financial assets. This dual trend could lead to the marginalisation of the use of central bank money, be it in the form of banknotes or in settlement systems. We, as a central bank shall never abandon cash; but this commitment cannot be our sole response to technological change. Second, the emergence of BigTechs and new settlement assets  (crypto-assets  and  stablecoins)  could threaten  our  monetary  sovereignty and our mandate to safeguard financial stability. Third and final factor, the progress made by extra-European CBDCs and notably by the digital  yuan, already accessible in the major Chinese cities. The risk is clearly that Europe will lose momentum not just in its drive to strengthen the international role of the euro, but even in preserving it. The challenge here is also a geopolitical concern. 2/ How: reasserting the anchoring role of central bank money thanks to a holistic approach Faced with these challenges, we want to be proactive and move forward in partnership with commercial banks.
Mr. Singer said that while the central bank remains worried about the possibility of another “hiccup” in the eurozone, he is less concerned than he was before the ECB first indicated in May that it was preparing to take action. “The outcome was more positive than I would have expected five months ago, and things look less gloomy than they appeared before they (ECB policy makers) found some consensus,” he said. The eurozone’s persistent economic weakness has been the main concern for policy makers gathered here over recent days. Those concerns were heightened by a run of very weak data from Germany that indicated the economy may have contracted for a second straight quarter in the three months to September. Mr. Singer believes those figures from August that recorded large falls in industrial production, manufacturing orders and exports are not reflective of the underlying state of the German economy, but instead the fact that there was a larger number of holidays than usual taken during that month. He said the Czech economy, which has a similar focus on industry rather than services, had experienced similar volatility in output over the summer months. “I would be unpleasantly surprised if the weakness in Germany continues,” he said. With its benchmark interest rate already at 0.05%, the Czech central bank last November pledged to maintain the koruna’s exchange rate at above 27 to the euro, effectively setting the firmest acceptable level for the currency.