peer - to - peer electronic cash system ) : “ what is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. " i feel that too little attention is being paid to nakamoto ’ s primary goal of constructing a groundbreaking, trustless electronic payment system which, like cash, would facilitate peer - topeer ( p2p ) transactions. at the same time, nakamoto was looking to create a currency which was not based on trust. this aspect – forging a new currency that does away with central banks 1 / 5 bis central bankers'speeches – has become a major talking point in the current debate. i have come here today to explain why a trustless currency is not feasible, and i will also argue that the merits of blockchain can be harnessed more readily with trustworthy institutions than without. to get a grasp of bitcoin, we need to put our minds to the essence of money. there are two types of money. money as a commodity, and money as a claim. money as a commodity, that could be a commonly used consumer good which is mostly nonperishable. cigarettes, for instance, were used as a money substitute in germany after the second world war. but equally, money could be a durable good – gold being the most prominent example of this. gold is extraordinarily durable, and it has an intrinsic value as a sought after industrial metal, say, or as jewellery. indeed, for centuries, delivering gold was regarded as the ultimate form of settling a claim. consumer and durable goods which can be used as money substitutes both have an intrinsic, consumption or utility value. virtual currencies, meanwhile, which are transferred much like goods, are a fabrication. that is not to consign them straight to the category of “ fraud ". yet they have no intrinsic value, just an exchange value. you can ’ t consume or use them, only exchange them. on the other hand, there is money as a claim. the bulk of our money – central bank money and commercial bank money – is a claim on either the central bank or a commercial bank. every euro in cash and every euro in credit balances in target2represents a liability for the eurosystem. and the euro is backed by the eurosystem with its constituent central banks, one of which is the

joachim nagel : welcoming speech a€ “ lithuanian evening welcoming speech by dr joachim nagel, president of the deutsche bundesbank, at the lithuanian evening, frankfurt am main, 4 july 2023. * * * check against delivery 1 introduction ladies and gentlemen, dear lithuanian - german friends, since croatia adopted the euro at the beginning of this year, lithuania has already become only the second - youngest member of the euro area. before lithuania joined in 2015, the bank of lithuania and the bundesbank signed an agreement on the acquisition of euro banknotes. 132 million banknotes were brought to lithuania from the bundesbank's vaults. 1 maybe some people took this as a symbolical birthday present, though a hefty one, weighing 114 tonnes! when the euro changeover was successfully completed, yves mersch, then a member of the executive board of the ecb, said : it is not only an enormous logistical achievement, but it is also a significant milestone for lithuania, strengthening the ties between the country and its european partners, and highlights the continued attractiveness of the euro. 2 since then, the eurosystem central banks have been working hand in hand as an anchor for price stability in the euro area. through times of low inflation, and now, when fighting inflation that is far too high. together with your neighbours estonia and latvia, your country has been the hardest hit in the euro area. the baltic countries suffered inflation rates above 20 %, which was more than twice as high as the euro area average. inflation has fallen from these peaks and is expected to ease further. the latest figures for june are : 5. 5 % in the euro area, 8. 2 % in lithuania, 6. 8 % in germany. like a beetle plague destroying the harvest, inflation harms our prosperity. beetles are useful in nature. but they should not get out of hand. on the governing council, we are acting in unison to get a grip on inflation. we will do what is necessary to bring it back to 2 %. to ensure a timely return to price stability, we are working together constructively. we can all learn from each other not only in the field of monetary policy, but also in other areas of central banking. i noted with great interest, for instance, that the bank of lithuania recently received a global award for financial market development : for its fintech newcomer programme. 3 so on the governing council, we all benefit from each other's expertise.