with our pledge to maintain favorable financing conditions. for instance, a rise in nominal rates due to better growth and inflation prospects may not cause immediate worries. in contrast, rising interest rates due to for example dysfunctioning markets warrants a corresponding policy intervention. • the recent increase in yields was largely driven by benign factors. taken at face value, the rise in inflation expectations is a welcome development. yet the sizeable and persistent rise in euro area yields due to a faster economic recovery in the us could prematurely tighten financing conditions for the euro area economy, which is inconsistent with countering the downward impact of the pandemic on the projected path of inflation. this has led to the decision by the governing council to frontload some of its purchases under pepp until the improved growth outlook for the euro area itself would stand on firmer ground. chart 5 shows that the upward pressure on the real rate component has been neutralized. • that being said, however, it is important to note that we stand ready to adjust our monthly purchases in either direction, if required, to maintain favourable financing conditions. international spillovers and the ecb ’ s monetary policy — 4 chart 5 : decomposition of the 10 - year ois rate into inflation and real rate 0, 4 0, 3 0, 2 0, 1 - 0, 1 - 0, 2 dec - 20 jan - 21 inflation component feb - 21 real rate component mar - 21 10 year ois swap note : graph shows the cumulative change since 1 december 2020 ( in percentage change ). the real rate is calculated by subtracting the inflation - linked swap rate from the nominal ois rate of the same maturity. daily data. last observation : 2603 - 2021. international spillovers and the ecb ’ s monetary policy — 5

, electricity and gas for our economy. they keep our economy going. and so, to increase the resilience of the european payment system, for whatever the future holds, we will likely need the digital euro – as a digital pan - european means of payment, supporting europe ’ s strategic autonomy in payments. this being said, a digital public currency will not crowd - out private initiatives. on the contrary, it will rather support ‘ crowding - in ’ – as it will pave the way for, and co - exist with, private solutions of european origin. and so, it is encouraging that private parties are now also stepping up their game in developing pan - european retail payments solutions. third, the digital euro meets society's demand for public money. today, there is a clear downward trend in the use of cash to make payments – as you can see on the next slide. © dnb & shutterstock in the netherlands, only one in every five transactions at a point of sale is made in cash. there is an overall decline in paying with cash. and this means that the role of public money in our economy is declining. to a certain degree, this is worrisome. and although there is no reason to think cash will fully disappear in the foreseeable future ; although the european commission, on the same day it proposed the draft digital euro legislation, also proposed a legislation on the legal tender status of euro cash ; the diminishing use of public money could pose a problem, because public money serves an important goal. it safeguards trust in our currency, alongside cash. it safeguards accessibility – all over the euro area, alongside cash. it safeguards inclusivity – for everyone, alongside cash. and let ’ s not forget that there is still a demand for cash – from the less digitally savvy consumers, to people who use it for budgeting purposes, to the elderly, and young people too. after the ‘ why? ’ comes the question of ‘ how? ’. and, as with many major innovations, there are challenges. let me share two with you. © dnb & shutterstock for starters, there are concerns about the impact of cbdcs on financial stability and on the banking system. let me assure you that a digital euro would not upend the healthy equilibrium that has existed for decades between bank deposits and central bank money, between private money and public money. how do we ensure financial stability? the digital euro would