chapter '. as a future participant in the euro area, we are following the european central bank's digital euro project, whose exploratory phase ends in october this year. this project is taking on more and more concrete dimensions and it looks like it will continue to develop. working groups have been established to develop rules ( rulebook ) relating to the digital euro scheme, its use as a payment instrument, liquidity management, etc. work is also underway on a specific legislative proposal of the european commission on the digital euro, which may come up as early as the summer of this year. it is expected to clarify also the potential status of the digital euro as legal tender. in order to guarantee the function of financial intermediation that banks have in the modern economy, the implementation of a limit on the funds that individuals will be able to hold in a digital euro account with the central bank is being considered. the digital euro has the potential to create the basis for integrated european retail payment and crossborder settlement solutions, as well as many additional innovations – e. g. tokenised deposits, smart contracts, conditional payments, etc. another important element on a global scale is the development of crypto - assets and their regulation. in the middle of may this year, the council of the european union finally adopted the final texts of the markets in crypto - assets regulation ( mica ) ; thus the european institutions developed and adopted a large - scale and detailed legal framework for the crypto - assets market in europe, having in mind that there are still very few attempts at regulation in this area. at the same time, a new regulation on 2 / 4 bis - central bankers'speeches information accompanying transfers of funds and the transfer of certain crypto - assets was adopted, which will achieve better traceability of transfers of crypto - assets and antimoney laundering. the mica provisions on'stablecoin'crypto - assets will start to apply in july 2024, and the remaining regulations on general crypto - assets, which do not have a stabilisation mechanism of their value, and on crypto - asset service providers – in january 2025. next, we expect the implementation of the measures envisaged in the eurosystem's retail payments strategy4, published by the ecb in 2021. an important aspect here is the development of instant payments in euro. one of the main objectives is to promote the creation of european retail payment solutions that are secure

on generating current profits. despite the deteriorated quality of loan portfolios, bulgarian banks did manage to keep considerable capital buffers, given the provisions of over bgn 4. 5 billion allocated only by october. is there any other country among the 27 eu member - states, apart from bulgaria, that in these circumstances could be proud of the remarkable 18 % capital adequacy and total liquidity ratio of nearly 22 %? once again i would like to point out that these outcomes are not accidental and do not come out of the blue. all that we have achieved so far is a result of both the long - standing and consistent efforts made by the bulgarian national bank for creating cushions and maintaining the stability of the system, and of the common sense and efforts of each and every one of you. thank you very much for this! the crisis could not make us turn away from the strategic tasks facing us, i. e. to be competitive, to provide the services needed by individuals and businesses, to be innovative and stand in the lead among the eu member - states so as to meet the demands of the future. in one of the most rapidly developing areas – payment systems, bulgaria marked a significant progress in 2010. the merger of the two most important operators borica and bankservice is accomplished. on 1 february, we launched into operation the national component of target2 ( target2 - bnb ). the connection of the national banking community to target2 is an important step in our integration into the euro area payment system, providing to the participating banks an opportunity to execute real - time eurodenominated transfers at an exceptionally low price. in parallel with launching target2 and the developments in the large payments area, we had the system for processing customers ’ payment in euro – bisera7 - eur – started from 1 february. the system processes eurodenominated payments in line with sepa standards. with the implementation of target2 and bisera7, banks and their customers have at their disposal a reliable and secure infrastructure for processing small and large payments in euro. this is a proper opportunity to invite any of you who, for one reason or another, have not yet availed of the advantages entailed in joining these two systems to do so. the most direct and broadest everyday contact of the general public with the banking system is through the banknote and coin related services provided to individuals and businesses. this year ’ s great event in this area was the commencement of operations