has a view on. research, of course, has to go beyond mere expressions of opinion. central bankers and researchers in the area of cash need to understand the fundamental drivers of cash circulation 1 / 5 bis central bankers'speeches and establish microeconomic evidence on cash usage. cash passed the conceptual stage centuries ago. it has been around ever since. cash is the only legal tender and, as such, it forms the basis for its cashless alternatives. going “ all cashless ” without the backing of a national unit of account is difficult to imagine. there always has to be the option to convert deposits into legal tender and the other way around. that is why research on cash is at least as relevant as ever. in a way, this means going back to the roots and asking the fundamental questions. as the title of this year ’ s conference suggests, we are living in the age of payment diversity. diversity is actually a concept derived from sociology. it implies that you recognise individual characteristics and allow for the inclusion of a range of people or objects. cash has several of those unique characteristics which greatly add to the diversity of existing payment instruments. first and foremost, cash is money because it fulfills fundamental macroeconomic functions. it acts as a store of value, a medium of exchange and a unit of account. let us briefly go through these well - known textbook functions in turn to see what they imply with respect to cash usage. 2 cash as a store of value ladies and gentlemen, as we will be talking over the next couple of days about cash usage in different countries, allow me to set the scene a little bit for germany. central banks “ make money ” in quite the literal sense. the physical banknotes we produce are our main output and, as such, straightforward to measure. the value of euro banknotes in circulation is growing. by the end of 2018, total banknote circulation exceeded 1. 2 trillion euros, and it is still on the rise. just like any other commodity, cash gets around. it crosses borders and switches hands. a considerable chunk leaves the euro area altogether. at the end of the day, about one - quarter of the total value of banknotes in circulation remains in germany, which is roughly in line with the domestic economy ’ s share of aggregate euro area output. of course, households use cash for transactions, but they use it even more so as a store of value. our estimates for germany suggest that around three out of four banknotes held domestically end

of information, consumers often do not have enough information to be completely protected. building the confidence of consumers also requires that there be adequate avenues for consumers to seek redress to enable consumers to resolve conflicts through an equitable process. also important are the requirements for complaints to be handled promptly by financial institutions. ladies and gentlemen, the malaysian experience let me briefly take a moment to share with you the experience of malaysia in developing an enabling environment to promote financial literacy. for several decades, malaysia has made significant economic progress. the economy grew by an average of 7 % per year, while the per capita income has increased from usd 300 in 1970 to usd 4, 236 in 2004. from a commodity - based economy, malaysia now has a highly diversified economy, with significant contribution from the manufacturing and services sectors. women account for about half of malaysian population, and have played an important role in this economic transformation process. women account for about 45 % of the labour force, with increasing representation at the professional, managerial and technical levels. such progress is achieved following increased educational opportunities that have been made available to women. female primary and secondary students account for half of total enrolment, while at public universities, female students account for 55 % of total enrolment. while women continue to play a major role in household financial planning, a new generation of women who are financially independent and sophisticated is emerging. the financial sector in malaysia has also experienced significant progress, with greater diversity of players, products as well as delivery channels with extensive distribution nationwide. the widespread distribution of financial institutions has been a conscious and deliberate policy to ensure the widest reach of financial services to both the urban and rural areas. with the improved access of consumers and businesses to financial products and services, consumer education on financial matters is an important priority for the central bank. consistent with the belief of the importance of instilling financial awareness at an early age, bank negara malaysia introduced a pocket money book to inculcate smart financial management habits among students in 1996. the programme also included household account books to assist families in the management of household income, savings and investments. this was distributed to cover a wider group, including women, teachers and workers. following this, in 1997 together with the education ministry, the central bank embarked on a school adoption programme. through this programme, more than 7000 schools have been adopted by banking institutions to play a leading role in educating school children on basic financial knowledge. in october this year, an online interactive version of