at the cusp of another important step, pointing to the possibility that central banks could issue new digital currencies ( cbdcs ). this also touches upon a question that bellamy grappled with in his utopia : the role of the state in the economy. in a market economy, the central bank should beware of hampering or crowding out private payment solutions for consumers. competition and regulation are essential for a good market outcome. the central bank should play a supportive role and act as a catalyst by providing the backbone of the payment system – trusted platforms that others can use to supply their services. the reliability and security of our critical infrastructures are thus of utmost importance to us. therefore, the bundesbank takes the outage of the ecb ’ s target2 platform in october very seriously. i fully support the announced independent review on payments infrastructure. we need to identify lessons learned and take proper actions in order to continue providing highly [UNK] and reliable infrastructures. in the remainder of my talk, i would like to discuss some opportunities and risks of offering cbdc to the general public and also elaborate on other payment solutions – topics that will surely be discussed further in the course of this conference. 2 opportunities and risks of retail cbdcs as such, digital money is not new. private households and enterprises make extensive use of bank deposits, which are nothing other than digital money created by commercial banks. in addition, commercial banks have long held digital claims on the central bank. consumers and businesses, however, have thus far only been able to use central bank money in the form of notes and coins. hence, the discussion largely focuses on “ retail cbdc ” – that is, central bank - issued digital currency which the general public can use alongside other means of payment like cash or credit cards. but, while some hail such a cbdc as the next logical step, it is not an end in itself, and others point to a “ lack of a concrete ‘ business case ’ ” at present. https : / / www. bundesbank. de / en / press / speeches / shaping - the - future - challenges - in - the - european - payments - market - 851850 2 / 9 01 / 12 / 2020 shaping the future – challenges in the european payments market | deutsche bundesbank when considering the issuance of a digital currency – or, in the case of the eurosystem, a digital euro – central banks must ask two questions : first,

lek billion ) t1 t2 t3 t4 money supply 10. 9 11. 0 11. 5 14. 0 47. 4 money outside banks 1. 7 3. 1 3. 2 6. 9 14. 9 lek deposits 4. 1 3. 6 3. 7 3. 4 14. 8 foreign currency deposits 5. 1 4. 3 4. 5 3. 7 17. 7 generally, the m2 aggregate growth will follow the performance of the economy demand for monetary assets. this demand is expected to higher in the first trimester of the next year. table 5. m2 and monetary assets demand growth ( in lek billion ). t1 t2 t3 t4 deficit financing 7. 2 4. 2 3. 6 5. 0 20. 0 credit to the economy in lek 0. 5 0. 5 0. 5 0. 5 2. 0 foreign currency reserve growth 1. 8 2. 4 1. 2 5. 4 sum 7. 7 6. 5 6. 5 6. 7 27. 4 m2 growth 5. 8 6. 7 7. 0 10. 2 29. 7 achieving equilibriums of monetary indicators and the reduction of the core interest rate down to the levels of early 2002, are expected to provide the normal growth of the m1 aggregate. demand deposits in lek are forecasted to be slightly higher in the coming year. however, the strongest impact on the m1 aggregate growth will be the growth of money outside banks. money outside banks is forecasted to increase by lek 14. 9 billion in the next year. money outside banks ratio versus money supply is assumed to be round the level of 28. 0 percent. such a forecast is based on the fact that this ratio has generally appeared as an equilibrium level in the albanian economy. also, the forecast for a stability ( or fall ) of interest rates, gives a greater back up to this assumption. however, considering the historic trends, this ratio is expected to have an upward trend in the last trimester of the year. money outside banks performance according to the monetary program will also enable the observance of nda objective of the bank of albania. taking it for granted that the nir performance of the bank of albania will stick to the program, the forecasted nda realization would be as follows : table 6. net domestic assets objective ( in lek billion ). december'03 march'04 june'04 september'04 objective 93. 1 80.