increasingly digital, we are looking into a digital product that complements our analogue product cash. 1 / 3 bis - central bankers'speeches second, the increasing use of digital technologies has led to rising interest in privacy and data protection. this also applies to digital payment systems. the problem is that private digital payment solutions often rely on third - party services, giving them access to consumers'payment data and allowing them to use this data for commercial purposes. a digital euro would offer the highest possible level of privacy. 2 the eurosystem would not have access to digital euro users'personal information. consumers would gain more control over their personal data. third, the digital euro would facilitate the development of pan - european payment systems. the euro has been around for a quarter of a century now. and though we have successful and advanced digital payment systems at the national level, there is still no cross - border single european solution for digital payments. in practice, german bank cards, for example, don't always work in other euro area countries, even if they contain a payment scheme operated by an international company. the digital euro would provide people with a digital means of payment that is standardised and would work in day - to - day transactions throughout the euro area. 3 recent advancements but let's come back to the present. what is the current status of the digital euro project? the eurosystem launched the digital euro project in 2021 with an investigation phase. in november 2023, the eurosystem embarked on the second phase of the project – the preparation phase. this involves finalising the set of rules for the digital euro and selecting providers to develop a digital euro platform and infrastructure. the bundesbank plays an active role in the digital euro project. against this backdrop, we have established a new department responsible for all tasks related to the digital euro. currently, the idea is for the digital euro to be used in two main ways : the standard usecase would be apps that are supplied by banks and other payment service providers, integrating the digital euro into their wallets. as an alternative, especially for smaller banks or service providers who do not intend to build their own app, the eurosystem would develop and provide a smartphone payment app. payments would be carried out in a contactless way, using so called nfc communication protocols, or by scanning qr codes. offline payments between two consumers are likewise to be possible. however, the introduction of a digital currency involves much more than just

in order to restore market participants ’ confidence in the european banking industry, but also to minimise reputational risk for the ecb. all supervisors in europe are familiar with ad hoc examinations. these are precisely the instruments we should be using here. this is the only way we can avert the suspicion of national supervisors taking too much account of national special circumstances. my other remark follows on directly : it concerns the legacy risks of banks supervised under the ssm. as these risks were created in the past, under the responsibility of individual member states, they should be borne in a national context, too. 6. changes to primary law i have twice mentioned changes to primary law in the context of the banking union : once referring to the ssm and again with regard to the srm. i am indeed aware that many are recoiling at the thought of changing primary law, as it is a long and winding road. ultimately, however, the project of creating a banking union is similar to the creation of the single monetary policy. and, we did things properly then and started by establishing a sound legal foundation. if it was good enough for establishing a monetary union, it will be good enough for a banking union. that notwithstanding, i think the ssm and a restructuring and resolution mechanism should be launched prior to changing eu primary law. however, we should start working on amendments to primary law right away, given the foreseeable difficulties and the amount of time this endeavour will probably take. 7. significance of the single supervisory mechanism to the bundesbank while i am here with you today, the ecb is visiting my colleagues at the bundesbank to put on a “ road show ” extolling its virtues as an employer. as goethe ’ s faust put it : “ two souls, alas! are dwelling in my breast ” – as much as i look forward to a single supervisory mechanism, to the success of which many of my fellow bundesbankers will be instrumental, i will be very, very sorry to have to do without them at the bundesbank. the ssm, after all, is designed in such a manner that the quality and expertise of national supervisors will continue to be the decisive factor. this constituent of the eu – the principle of subsidiarity – will have a place in the banking union, too. nonetheless, themes relating to banks and their supervision and resolution will acquire a new european dimension. and, as long as it is done well, this