– adoption is likely to rise however. 4 another motive for considering cbdc is possible efficiency gains in cross - border payments. project dunbar, a partnership between australia, south africa, singapore, malaysia and the bis innovation hub, aims to explore the challenges and benefits of a common settlement platform for cross - border payments between multiple central banks using digital currencies. similarly, the “ mcbdc bridge ” project aims to improve cross - border payments by looking into 1 / 5 bis central bankers'speeches the potential of common interoperable platforms for multiple cbdcs. project partners from hong kong, thailand, china, united arab emirates and the bis innovation hub have already successfully set up a respective prototype platform. 5 to give you one last example, the united states is less advanced in its considerations, but seems to be picking up speed. in march, president biden signed an executive order to assess the risks and benefits of creating a cbdc, as well as other digital asset related topics. 6 3 challenges and opportunities associated with cbdc let us take a closer look at the potential challenges and opportunities of a central bank digital currency : cbdc would be a third form of central bank money alongside cash and bank reserves. if well designed, cbdcs could combine the improved efficiency provided by modern, digital processes in payments with the safety provided by a central bank in a single means of payment. consequently, we see various possible benefits of cbdc, if well designed : a cbdc could offer access to a safe, instant and efficient digital means of payment for all population groups, including less digitally savvy groups of society. it would also be beneficial if cbdc could support offline payments. people would benefit from a digital and cost - effective cash alternative to choose from. and cbdc could facilitate the emergence of a new digital eco system with full paneuropean reach and the availability of new services, resulting in possible productivity gains, for instance by providing digital money that could be used in programmable environments. more precisely, a cbdc could be suitable for completely new use cases in the “ internet of things ”. depending on the design of a cbdc, private actors could offer completely automated payments based on smart contracts. for example, electric car charging could be paid for immediately and without further intervention by the driver. this calls for new forms of collaboration : recently, jp morgan announced a partnership with siemens, bringing payments and products closer together. 7 however, if a cbdc were to

conducted at the european level and fiscal policies conducted at the national level. basically, there are two ways to realign this imbalance : either the european level gains certain control rights over national budgets – which would mean a deeper political bis central bankers ’ speeches integration. or we leave control of fiscal policy at the national level. but then the national level also has to assume liability for its policies – that would mean strengthening the maastricht framework. the first course would amount to what is known as a fiscal union. but that would depend on the countries of the euro area transferring national sovereignty to the european level – for example, by giving the european level the right to intervene in the case of unsound public finances. giving up sovereignty in this way would be a radical change and require wide - ranging legislative changes nationally and at the european level. more than anything, such changes would need the support not only of policymakers but also of the general public. and, on this point, we should be realistic. it is not possible to identify any willingness to do that at present – not in germany or in any other country of the euro area. this just leaves the second course of action : that is, an improved maastricht framework, a “ maastricht 2. 0 ”. among other things, that means strengthening the rules on borrowing – the stability and growth pact not only needs teeth, it also has to be able to bite. the rules have since been tightened – now they have to be applied and complied with. a “ maastricht 2. 0 ” would also mean taking the no bail - out principle more seriously again. but that calls for the possibility of sovereign default as the ultimate logical conclusion of individual responsibility. sovereign defaults have to be possible without destabilising the financial system of the euro area as a whole. 3. 3 the banking union as part of a better architecture and that is an important point, because the close link between government finances and the financial system was a major element of the crisis. basically, this is very much a vicious circle : if public finances run into difficulties, the banks are put under strain – if the banks hold government bonds on their balance sheets, for example. conversely, if banks run into difficulties, public finances are put under strain. take the example of ireland : in order to save its banking sector, ireland ran up a budget deficit amounting to 30 % of its economic output in 2010. there are various approaches