anita angelovska bezoska : let's get digital speech by ms anita angelovska bezhoska, governor of the national bank of the republic of macedonia, at the nbrm ’ s 11th conference on payments and market infrastructures “ let's get digital ”, ohrid, 6 - 8 june 2018. * * * distinguished guests, ladies and gentlemen, it is my great pleasure to welcome you to the 11th edition of the conference on payments and market infrastructures hosted by the national bank of the republic of macedonia. the organization of this conference has been traditionally supported by de nederlandsche bank for which we are very thankful and over time, this initial bilateral cooperation attracted involvement of other central banks and ifis. in this context, i would like to extend our appreciation to banco de portugal for its contribution in the past editions, as well as to the bank of italy, the national bank of belgium and the national bank of serbia for their contribution to this conference. also, particularly valuable is the continued participation of the european central bank, the bank for international settlement and the european commission given the prominent role these institutions play in the payments area. this year ’ s conference focuses on digital transformation, a process that is heavily penetrating across all segments of our business and private lives and will take even greater significance in the years to come. the digital transformation in finance has been rapidly evolving with the emergence of fintech sector. according to the ernst & young ’ s fintech adoption index, one - third of consumers utilize at least two or more fintech services and they are becoming increasingly aware of fintech as a part of their daily lives. the fintech adoption index for services offered by fintech organizations under five broad categories – money transfers and payment services, financial planning tools, savings and investments, borrowing and insurance, indicates that money transfers and payment services are continuing to lead the fintech change, with adoption standing at 50 % in 2017 and 88 % of consumers anticipating of doing so in the future. thus, the global payments industry is currently undergoing a paradigm shift driven by rapid advances, the influx of new technologies and evolving consumer behavior as digital generations come of age. the emerging fintech enhances the transformative power of digital payments via innovation. the irruption of digital payments relates to its many opportunities. embracing payments digitalization has the potential to substantially reduce the costs, increase the efficiency and enable broader access to payment services. with the rise of new payment digital technologies developed by

the influence of the payment systems on monetary policy needs to be assessed not by efficiency alone, but by reference to the velocity of money, defined as the average frequency with which a unit of money is spent in a specific time, under the assumption of a given money supply. velocity of money circulation is endogenously determined by the economic agents ’ decisions regarding liquidity holding, lending, borrowing, investing, consumption and labour. yet an increase in the efficiency of payment systems increases the velocity of money circulation exogenously. from a monetary policy point of view it becomes important to estimate the quantitative and qualitative impact of this exogenous change. an increase in the efficiency of payment systems results in an increase in the use of accounts relative to the use of banknotes and coins. less time is required for each peace of money or securities to lie unused in an account between two successive payments, leading to a shorter time period between inflow and outflow, i. e. to a higher velocity of money in bis central bankers ’ speeches circulation. the new situation is reflected in a higher turnover in markets, provided that economic agents are able to use the electronic forms of payment, are able to monitor their cash flow and are confident that the increased efficiency does not compromise security in terms of fraud. the task of the central bank is to facilitate a more efficient management of liquid funds. an efficient management of liquid resources enables economic agents to use cashless payment systems not only as a signal for their willingness to pay, but also to pay for the exact amount they owe. cash payments, in contrast, make economic agents incur costs in the form of interest foregone and increased security risks however, the increase in the velocity of money circulation is not linear. as technological advances in payment systems are seldom used at their maximum capacity, the increase in their efficiency is a gradual, rather than spasmodic process. in order to better estimate the impact of technology - driven change on the velocity of money in circulation and thereby on monetary policy, central banks thus need to use data from a variety of sources in sum, payment systems are an essential precondition for the implementation of operational monetary policy and their degree of sophistication has a direct impact on the velocity of money circulation, thereby influencing monetary policy itself turning to financial stability, there is a strong link between efficient payment systems and financial stability. financial stability implies that the financial system is robust to systemic risk, i. e. the risk that problems in one