century china, today ’ s security features and materials are very much up to date. banknotes have stood the test of time – and they continue to do so. but, however much that may be the case, the leap into the digital realm has not been made. not yet. with such a leap into the digital realm, we would extend the public ’ s trust in physical banknotes to the digital world. to do so successfully, a banknote ’ s digital twin must have the same features as physical banknotes have today. no one needs to know what you pay for with digital euros – just like with cash. the balance, though, between privacy and other public policy objectives, like countering money laundering and illicit activities, is ultimately for the european co - legislators to decide. everyone must be able to use the digital euro, including the less digitally savvy. just like cash. everywhere in europe, at every point of sale, to every other person, you should be able to pay with the digital euro, just like cash. digital euro holdings will not be remunerated, in line with the non - remuneration of cash. indeed, the digital euro will have all the good things of cash. most notably the offline functionality, which is to be offered from the outset, will be instrumental. offline is the embodiment of a digital version of cash, bringing true and unique added value to consumers and retailers, not just in my home country. a digital euro must provide for both online and offline use cases to fulfill the promise of being able to pay with public money anywhere in europe at any time. © dnb & shutterstock a second reason why we are investigating the digital euro is that it will provide a public answer that – together with private solutions – will lay the puzzle for a more integrated european retail payments market. digitization has brought innovative solutions to the european payments market, but two characteristics stand out : one – our european retail payments market is heavily fragmented along national lines ; and two – our european digital payments market is, essentially, dependent on non - european technologies or non - european parties. to cut to the chase : currently, we do not have a pan - european digital retail payment solution of european origin. and though this doesn ’ t have to be a problem in normal times, it does raise questions about european strategic autonomy in adverse times. because no matter how you look at it, payments – whether cash or digital – are like water

, 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