in the payments space could grow too large. but these are not fears which i share. and i would even go so far as to say that, with the proportion of cash transactions declining, you can – if anything – view it as a step towards maintaining the size of that footprint as it stands today. 5 centralised or decentralised settlement? the introduction of central bank digital currency poses a major challenge from a technical and economic perspective. the system needs to be capable of processing an extremely high number of payments per day in a secure and swift manner. and this is precisely where centralised settlement infrastructures could have an advantage over decentralised settlement. the scalability trilemma is a term used in specialist circles to refer to the idea that only two out of three attributes – scalability, decentralisation and security – can be ensured to a satisfactory degree at the same time. well, nobody has any interest in a system which is insecure. so, if the scalability trilemma holds true, a decentralised settlement system would leave only the option of the combination with security. but this would then be at the expense of scalability. [ 4 ] if a payment system is unable to process enough transactions, it could lead to fragmentation in the payments market. the dawn of the railway age in germany also saw a similar problem. each small state had issued its own money, meaning many different currencies existed alongside one another in germany. while the newly constructed railways allowed people to travel quickly to a neighbouring small state, if they wanted to buy anything, they had to change their money every time they crossed the border. added to this, there were so many different exchange rates that it was a real hassle to keep track of them all. and this was how things stayed until currency was centralised. in 1871, a decision of the german parliament introduced the mark as the common currency throughout the entire territory of the kaiserreich, rendering the need to change money at borders within germany obsolete. a milestone in the history of money in germany. 1. deutsche bundesbank ( 2022 ). payment behaviour in germany in 2021. 2. deutsche bundesbank ( 2022 ). payment behaviour in germany in 2021. 3. 5 / 6 bis - central bankers'speeches 3. deutsche bundesbank ( 2021 ). payment behaviour in germany in 2020 – making payments in the year of the coronavirus pandemic. 4. auer, r., c

change in the needs of the economy and of consumers when it comes to making payments. in a nutshell, payments in the digital world need digital means of payment. private enterprises were quick to spot this pivot in requirements and developed well - functioning payment solutions. once again, the market economy has demonstrated how swiftly it can adapt to new needs and cater for gaps in the market. however, some developments here are problematic, three of them particularly, in my view : first, the lock - in effect ; second, data protection ; 2 / 6 bis - central bankers'speeches third, strategic dependencies. bigtech firms recognised the value of data in general and of payment data in particular early on. almost all the major providers of technology platforms are based outside europe. they are constantly adding new services to their digital ecosystems, which then make it attractive to use other services within those ecosystems as well. these include almost seamlessly integrated payment options which make life very easy for customers. i imagine most of us are happy to complete a purchase along with the related payment within a matter of seconds. things get problematic when users become dependent on one particular provider because of the services offered within its digital ecosystem. this is a phenomenon known as the lock - in effect, where the platform and the digital ecosystem become a gilded cage. there are all kinds of reasons why this dependency can come about, but it often relates to the costs or other barriers that prevent customers from leaving. providers try to make it as unattractive as possible for users to switch to other platforms. they can minimise the incentives to switch providers if : they offer a particularly user - friendly service ; they have acclimatised users to a digital environment and these users don't want the hassle of learning something new ; there are some services they offer exclusively on their platform ; or switching platforms comes at a cost that users aren't willing to bear. that cost doesn't necessarily need to be a financial one. just think about how much time and effort it takes to train an algorithm to learn your taste in music. this lock - in effect can prove inefficient from an economic perspective if, for instance, customers pass up on a better offer because switching seems like too much effort. the upshot is weaker competition. that is why we, as a central bank, are committed to promoting such concepts as open standards and harmonised interfaces in the world of payments. this increases competition, and counteracts lock - in