bostjan vasle : digital euro - cash meets technology opening speech by mr bostjan vasle, governor of bank of slovenia, at the event " digital euro : cash meets technology, ljubljana, 15 december 2023. * * * ladies and gentlemen, dear guests, good afternoon and welcome at the banka slovenije event on the digital euro project. as digitalisation is rapidly progressing, money, payment and financial systems are following suit. at today's event, we will explain what the digital euro project is all about, how it is progressing and what this means for our currency. * * * money and payments have been digital for decades. the euro has existed in electronic form since its introduction, for consumers as a commercial bank money. despite that, most people have persisted to pay with cash. however, this pattern is gradually changing. today, europeans make most of cashless payments with credit and especially debit cards. in addition, for transactions between consumers themselves and with businesses, instant payments emerged about two decades ago. this enabled transaction to be a matter of few seconds, regardless of the day or the hour the payment is made. besides technological progress, external shocks played a role – positive in this instance. pandemic, namely, provided an additional boost to contactless payments. however, instant payments are not yet the new normal and remain limited, especially for cross - border transfers. * * * meanwhile, the central bank money is at the moment still available to the general public in physical form only, as cash. providing central bank money to everyone also in the digital form, alongside cash, could help us to ensure that our common currency – the euro – is fit for digital age. and here, i would like to mention three aspects. firstly, with a digital euro, european citizens and businesses would be able to make and receive instant digital payments throughout the euro area, free of charge. digital euro could be used for purchases in physical shops and for online purchases, as well as for transfers to other individuals. with digital euro, it would be possible to pay like 1 / 2 bis - central bankers'speeches with any other digital payment method, with an internet connection, but we also strive to make offline payments available. to emphasise, such a universal pan - european payment method is not yet available to consumers. secondly, launching a digital euro would increase competition in the digital payments market, enhance the overall efficiency and reduce costs in payment services. thirdly

/ 6 bis - central bankers'speeches we had at that time a so - called changeover board that conveyed clear messages throughout the process, and this showed a clear commitment to the project at the highest levels of the government and the central bank. further, according to our experience, one of the key challenges in introducing the euro was explaining the breadth and depth of the impacts of the project to businesses, the public and others. i think the success of our introduction of the euro was also in part based on the fact that the public was very familiar with the currency. and here i think there are many parallels between slovenia and croatia, although that familiarity is perhaps now even greater in the latter than it was in the former. when we introduced the euro, the common currency had only been used as physical notes and coins for six years, whereas now it much more widely known, especially due to the fact that croatia has such strong ties with eurozone countries, and not only due to tourism. maybe it is strange to mention this, but in slovenia we had a national campaign that targeted citizens who were most likely to be unfamiliar with the euro. however, i am sure that these groups are smaller and less numerous in croatia today compared to slovenia back in 2005 and 2006. at that time it was an interesting supporting factor that many slovenians already held their savings in euros, often in physical form. this came from the time when we were saving in deutschmarks, back in the days of yugoslavia, and having cash under the mattress was nothing unusual. since we share that sad part of our history, this is probably also true for many in croatia, even though those years are now more than three decades behind us. the high level of legal certainty during the process was also very important in our case, and i have noticed that croatia has fully followed our good practice in this regard, and the authorities have defined and communicated to the public the details of the planned changeover well in advance. one of the most interesting issues during the introduction of the euro, and also in the following years, was that of inflation caused by adopting the currency. because i spend so much time in croatia in a personal capacity, i have a feeling that the same thing is also happening here. i remember back in the early 2000s, when the euro was first introduced by some eu countries, there was a joke in germany that the new currency was in fact the " teuro " – since " teuer " means expensive in german.