the functions of money, the first tier could serve as a means of payment. the central bank would have to refrain from setting a lower or a negative interest rate in order to keep a cbdc attractive to the public as a means of payment. while the second tier could serve as a store of value, the central banks could discourage people from using it as such by setting unattractive interest rates. however, such schemes should draw from the experience of multiple exchange rate regimes. and the repercussions of the intentional use of such schemes need to be subjected to an additional comprehensive investigation. so we have plenty of questions on cbdc to discuss. i am nearing the end of my speech but look forward to exchanging views with you during our virtual q & a session. conclusion 3 / 4 bis central bankers'speeches in monitoring the evolution and uses of technology, the ecb respects technological neutrality. we do not serve technology – technology serves us. we will only introduce a digital currency if we become firmly convinced that it is both necessary and proportionate to fulfil our tasks in ensuring the stability of our currency. in the meantime, we take a keen interest in digital innovation and in the changing expectations of money users, and we are refining our thinking on cbdc – both within the ecb, the eurosystem and in the international central banking community. cbdc design choices are not merely technical questions. they have policy and legal implications. this is why we are devoting so much attention to every detail. if and when the time comes, we want to be ready – and we will be ready. 1 see boar, c., holden, h. and wadsworth, a. ( 2020 ), “ impending arrival – a sequel to the survey on central bank digital currency ”, bis paper, no 107. 2 including payment solutions denominated in currencies other than the euro, which could affect monetary sovereignty. 3 survey data from 2017 ; see esselink, h. and hernandez, l. ( 2017 ), “ the use of cash by households in the euro area ”, occasional paper series, no 201, ecb. 4 blog post by fabio panetta, member of the executive board of the ecb, ( 28 april 2020 ) : “ beyond monetary policy – protecting the continuity and safety of payments during the coronavirus crisis ”. 5 dyson, b. and hodgson, g. ( 2016 ), “ digital cash : why central banks should start

shocks very gradually, or, more exotically, “ rational inattention ”, which formally recognizes the limits to agents ’ information processing abilities. these points are clearly high on the agenda as christiano, l., motto, r. and rostagno, m. ( 2003 ) : “ the great depression and the friedman - schwartz hypothesis ”, journal of money, credit and banking, 35 ( 6 ), 1119 – 1197. major contributions include : benartzi, s. ; thaler, r. h. ( 1995 ) : “ myopic loss aversion and the equity premium puzzle ”. quarterly journal of economics, 110 ( 1 ) : 73 – 92 ; daniel, k., hirshleifer, d. and subrahmanyam, a. ( 1998 ). “ investor psychology and security market under - and overreactions ”. journal of finance, 53 ( 6 ) ; hogarth, r. m. ; and reder, m. w. ( 1987 ). rational choice : the contrast between economics and psychology. chicago : university of chicago press ; kahneman, d. and diener, e. ( 2003 ). well - being : the foundations of hedonic psychology. russell sage foundation. woodford m. ( op. cit. ). for instance, a notable policy recommendation arising from akerlof and shiller ’ s book “ animal spirits ” was to set targets for credit growth. and yet, credit developments already are an important input into the ecb ’ s monetary analysis. bis central bankers ’ speeches well. but what we don ’ t want on our wish - list is to include all these features in a single big model as was done in the 1960s and 1970s. that would be a recipe for utter complexity and obscurity. it is also evident to me, as a policy - maker, that policy decisions are shaped by interactions between actors or interest groups. take the question of euro area adjustment. who will bear the cost of the much - needed sovereign and private deleveraging? to what extent will the social cost of the crisis bear on political outcomes, and thus on economic policy decisions? how much fiscal risk - sharing can be accepted by the people of europe, and what should be the optimal combination of inter - temporal risk - sharing through balanced budget rules, “ horizontal ” risk - sharing between countries ( such as through the esm ), and “ vertical ” risks