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

chains. supply shortages were particularly noticeable in electronic components such as semiconductors, household goods and construction materials. supply bottlenecks also occurred in china, where cars and their components, as well as machinery and industrial tools were affected. let us put some numbers to it. what did that mean for the german economy as a whole? bundesbank analysts estimated that in april 2020, nearly one - quarter of the decline in production in germany was due to supply chain disruptions related to china. 2 this was because the manufacturing sector is highly interconnected through the trade of intermediate goods. for sure, the supply chain shortage had negative effects. and, based on this experience, it was rational for corporates to diversify risks connected to these supply chains. besides diversification, international cooperation also proved its benefits during the crisis and in its aftermath. our economies were able to quickly provide the goods that suddenly found skyrocketing demand. test kits, respirators, respiratory masks and vaccines all were produced in large scale and the world benefitted from that. with its strong links between our countries, the german manufacturing industry was able to quickly adapt to the pandemic - related shifts in demand. so, despite the significant short - term consequences of the supply shortfalls in the early phase of the pandemic, the clear benefits of upstream integration are evident. globally. the abrupt interruption of supply chains during the pandemic was – after all – only temporary. it was, in essence, an unintended test for the global system. 2 lessons for the future what lessons did we learn? the disruptions to global supply chains underlined the urgent need for strengthening resilience. here, strong connections between our industries can be an important element. a fragmentation of the global economy has no winners. we all know that protectionism typically leads to a decline in growth. and protectionism would be particularly harmful at a time when we in china and germany are facing similar changes : we need to give our economies fresh impetus. currently, growth rates in our economies are lower than they used to be. 2 / 4 bis - central bankers'speeches with inflation pressures receding, the eurosystem has lowered its deposit facility rate by 75 basis points to 3. 25 %. in china, the pboc has lowered its key interest rate further and the 7 - day reverse repo rate now stands at 1. 5 %. longer - term interest rates have also come down somewhat in both currency