news conference 15 december 2022, 10. 00 am introductory remarks by martin schlegel i am pleased to give you an assessment of current developments with regard to cash. since june, after many years of strong growth, we have seen a significant decline in banknote circulation. to contextualise this decline of approximately 10 %, let me first say a few words about the above - average growth in recent years. in the period since the 2008 financial crisis, the value of banknotes in circulation grew, on average, more than twice as fast as in the two preceding decades – by around 6 % instead of 2. 5 % per year ( cf. chart 1 ). between mid - 2008 and june 2022, the value of banknotes in circulation more than doubled overall, from around chf 41 billion to chf 91 billion. this sharp increase was driven in particular by the desire of companies and private individuals to hold cash as a store of value. there was particularly strong demand for the large denominations, such as the 1000 - franc and 200 - franc notes ( cf. chart 2 ). we see two reasons for the increased demand for cash as a store of value over the last 15 years or so. first, there were multiple periods of high uncertainty, notably the financial crisis and the coronavirus pandemic. cash tends to be popular as a secure store of value during such times. second, the general decline in interest rates – and negative interest rates in particular – also contributed to the increased demand for cash. when interest rates are low or negative, it is relatively attractive to hold cash ( as opposed to bank deposits, for example ) as a store of value. the increase in interest rates since june has meant that there is once again less of an incentive to hold cash. against this backdrop, the value of banknotes in circulation fell by around chf 10 billion to chf 81 billion between june and october. returns of the 1000 - franc notes in particular were substantial, totalling chf 7. 7 billion. we expect this decline to continue. nevertheless, demand for cash as a store of value is likely to persist. companies and households consider such a safety net to be important. page 1 / 2 berne, 15 december 2022 martin schlegel news conference of course, cash is not only used to store value, but also to make payments. small denominations in particular play an important role here. the decline in banknotes in circulation observed since

you travel in the euro area, the digital euro would always be recognised and you would be able to pay with it. the first releases are likely to offer contactless payments, qr codes and an easy way to pay online. [ 21 ] as the technology evolves, other forms of payment may become available in the future. when it comes to the hardware, people could pay either with mobile phones, physical cards or possibly other devices like smartwatches. a convenient user experience requires close cooperation with all sections of the market : consumer groups who know best about consumer needs ; intermediaries who would provide services to their customers ; and merchants who want to offer a convenient payment solution. we have started work on the digital euro scheme rulebook [ 22 ] to ensure a harmonised and user - friendly solution that works everywhere in the euro area. the work agenda for 2023 let me conclude with the work agenda for the next months. we will continue our investigation phase in 2023 and regularly involve this committee in our work. together with the european commission, we are still analysing a possible compensation model for the digital euro. in parallel, we are reviewing all the design options to bring them together in a high - level design for the digital euro in the spring. we are also finalising our prototyping [ 25 ] work and seeking input from the market to get an overview of options for the technical design of possible digital euro components and services. i will discuss all these topics with you in the upcoming months, before the governing council endorses any design and distribution options. in the autumn our investigation phase will come to an end. only at that point will the ecb governing council decide whether to move to the realisation phase. chart 2 : digital euro project timeline let me emphasise, once again, that moving to the realisation phase does not mean issuing the digital euro. during this phase we would develop and test the technical solutions and business arrangements necessary to eventually provide and distribute a digital euro, if and when decided. the possible decision by the governing council to issue a digital euro would be taken at a later stage and only after the parliament and the council of the eu have adopted the legislative act. the digital euro project is a truly european initiative. and it is not just a technical project : it has a clear political dimension in view of its broad societal implications. all european policymakers must thus play their part, bearing in mind our respective roles and mandates. and we must always