dlt carries great potential, but is it already advanced enough to be applied by central banks? reputation is crucial for central banks. we cannot afford mistakes in the technologies we employ. before the central bank can start providing dbm to non - banks, we need to be sure not only that dbm is unlikely to have negative economic side - effects, but also that the relevant systems are operationally efficient and safe. but we should not be dogmatic, either. if a more efficient, but absolutely safe, technology for central banking operations can be found, introducing it could reduce costs for both the central bank and users, and therefore for society as a whole. conclusions let me conclude. there are many ways to design dbm for non - banks. the different options have potential impacts – both positive and negative – that need to be studied and considered carefully. only when the best way of designing dbm has been identified, can a decision be made as to whether dbm of non - banks should be introduced at all. the most important question for the ecb is whether introducing a dbm would affect our ability to honour our mandate. the impact may be negative if non - banks replace commercial bank deposits with dbm to a significant extent. more generally, any materialisation of dbm would have to be assessed against four principles : ( 1 ) technological safety, ( 2 ) efficiency, ( 3 ) technological neutrality, and ( 4 ) freedom of choice for users of means of payments. as there has been some speculation about a possible intention of central banks to abolish cash, please let me stress one aspect relating to the principle of freedom of choice : if dbm for nonbanks were introduced, it would exist alongside cash for the foreseeable future. it would merely be an additional option for non - banks to hold funds. in particular, those who are sceptical about digital devices would naturally continue to use cash. even where efficiency gains are possible when people substitute some of the cash for dbm, this would still require that the technology used for dbm be operationally reliable and secure against attacks. technological feasibility and cost considerations alone will not change our mandate. thank you! 4 / 4 bis central bankers'speeches

rate as excess central bank reserves held by commercial banks, i. e. at the rate on the deposit facility. this would mean applying a policy rate directly to funds held by non - banks. this could potentially strengthen the transmission of monetary policy rate decisions to the economy. the deposit facility rate is currently – 0. 4 %. at this interest rate, demand for dbm may be low. but in normal times, when it is positive, remunerating dbm at the deposit facility rate may be risky. it could make it too attractive to convert commercial bank deposits into dbm. as i argued a few minutes ago, this could have negative side effects. an alternative option would then be to remunerate dbm at a rate of 0 %. this is the rate at which cash ( i. e. banknotes and coins ) is de facto “ remunerated ”. with a rate of 0 %, non - banks are unlikely to convert commercial bank deposits or cash into dbm if their motive is only to obtain a better remuneration. even in times of negative central bank rates, retail bank customers rarely receive a negative remuneration on commercial bank deposits. even so, a 0 % interest rate on dbm held by non - banks is not without policy risks. if banks have large amounts of excess central bank reserves remunerated at a negative rate, they could try to find ways of replacing their excess reserves by dbm, such as by setting up a non - bank subsidiary. this may counteract monetary policy. 3 / 4 bis central bankers'speeches if the central bank considered this risk important, it could combine the two approaches i have mentioned so far. it could remunerate dbm held by non - banks at a rate of 0 %, if the deposit facility rate is positive. and if it is negative, we could remunerate at the deposit facility rate. this may, however, entail strong movements out of dbm when the deposit facility rate turns negative. moreover, there is a risk that a negative remuneration of claims of non - banks on the central bank would substantially undermine the confidence in the central bank. technology for dbm finally, let me mention the technological dimension of dbm. i said that one reason why the discussion on dbm for non - banks has started is that we now have technologies that could make it easier to issue dbm. this includes, in particular, distributed ledger technology ( dlt ).