is the bundesbank in south africa? south africa and germany can look back on a long history of strong economic ties that we should strive to promote further. in fact, south africa is germany ’ s most important trading partner in sub - saharan africa, while germany is the second - largest trading partner for south africa. trade between the two countries climbed to new records in 2015. encouragingly, the bilateral trade volume grew to more than 15 billion euro in 2015. south africa ’ s exports to germany rose by close to 20 per cent to around 5 billion euro. at the top of the export list were vehicles, parts and accessories, gems and precious metals as well as machinery. at the same time, exports from germany to south africa also grew by approximately 16 per cent to about 9 billion euro, the main components also being vehicles, parts and accessories together with machinery and electronic equipment. there are over 600 german companies operating in south africa, including basf, bayer, bilfinger berger, bmw, db international, dhl, mercedes benz, mtu, sap, siemens, thyssenkrupp and volkswagen, to name only a few. together, these companies are estimated to provide around 90, 000 jobs and contribute significantly to vocational training and technological development. bis central bankers ’ speeches this engagement shows that south africa has a lot to offer. your country has vast economic potential, and with your developed financial, communications and transport infrastructures, german investors also see south africa as a bridge to other african markets. conditions are excellent for deepening cooperation and boosting bilateral trade. besides the manufacturing industry, german businesses see particularly promising investment opportunities in the energy and infrastructure sector as well as the information and telecommunications industry. with our representative network, the bundesbank can now track developments in nearly all the g20 countries – directly or indirectly – thanks to the regional expertise : new york is responsible for the united states, canada and mexico ; tokyo observes japan, korea and australia ; sao paulo keeps an eye on all the south american countries ; and singapore observes south east asia, especially including indonesia as a g20 member of the region. by expanding our representative network, we are pursuing the goal of having a presence in the main industrial as well as emerging economies and of tracking developments in almost all the g20 countries, directly or indirectly. given the growing role that the african continent at large and south africa in particular is playing in the sphere of international economic and financial policy, the african continent has, up

bundesbank. unlike consumer or durable goods, central bank money does not have any consumption or utility value. and the issuing central bank ’ s credit quality and integrity is reflected in the value of its currency. the value of a currency, then, hinges on trust in the central bank. not just that : the issuer – so in the euro ’ s case, the eurosystem – takes collateral from its monetary policy counterparties as a “ deposit ” for providing euro currency. that indirectly anchors the euro in the real economy. virtual currencies, by contrast, have no issuer, no footing in the real economy. no one has to redeem them. they are a fabrication and propagate according to a fictitious set - up in virtual systems which, in some cases, can be altered or newly created at the whim of a small group of participants. what is more, their governance regime is opaque, if not to say obscure – not to mention the fact that the identity of the participant or participants – no one knows for sure how many there are – behind the pseudonym satoshi nakamoto remains shrouded in mystery. virtual currencies are exchanged in the same way as goods, but they have no intrinsic value of their own. that is undoubtedly one reason why their value is highly volatile. over the long term, that naturally also exposes bitcoin holders to the risk of total loss. for us, bitcoin is not money, it is a speculative plaything. the great number of sometimes dubious initial coin offerings is a clear indication that bitcoin is more of a funding instrument. to repeat : it is more of a speculative plaything than a form of payment. hence my repeated warnings against investing in virtual currencies. we are witnessing a remarkable increase in the value of some virtual currencies. but that does not alter the risk of total loss. 2 / 5 bis central bankers'speeches 2. blockchain / dlt in the world of payments for us, bitcoin ’ s most important contribution is the underlying blockchain technology, or to put it more broadly, distributed ledger technology ( dlt ). this technology could help boost efficiency in payment and settlement processes. that is why we have been looking at this technology from three different perspectives. first, the bundesbank develops and runs major payment and settlement systems, often in conjunction with other central banks, and in this context we explore innovative technical capabilities which can