as well as for the good of the cypriot economy, become better and more efficient at serving their clients. i have made this point to the ceo's and chairmen of the banks a number of times and i also called a meeting between the cbc, economy stakeholders like kebe, institute of certified public accountants of cyprus, the cyprus bar association and the cyprus banks to promote and facilitate better and more efficient ways of doing business with the banking sector. whereas as agreed, follow - on meetings have subsequently taken place 3 / 5 bis - central bankers'speeches between the stakeholders, i'm forced to say that i have not seen practical progress. i call on all parties to continue the discussions but more importantly to move from talking to doing. in order to help this situation as well as the economy, at the cbc we also initiated a project to digitise the banking sector's client onboarding process as well as the exchange of customer information between banks. let me be clear : this is not the responsibility or remit of the central bank. however, i decided for this to happen in order to push this technological change in the banking sector. we set this project as a priority and obtained the commitment of cyprus banks to embrace and participate in the project. we are now at an advanced stage of formulating the technical and legal requirements for the project. the project, as envisioned by the cbc, will be a flexible and scalable solution to be implemented in phases. phase one, will be the remote digital onboarding of new customers through a seamless digitalised process and an optimised customer on - boarding experience, thereafter expediting the remote updating of customer data and information. digitalisation of the onboarding process will initially focus on cyprus citizens, allowing for expansion to include eu and non - eu citizens as well as legal entities and, to the extent possible, similar structures. in other words it will learn to walk before it will run. phase two will roll out an interoperability solution with utility service providers and governmental services, allowing for possible incorporation of electronic ids as provided for in the european regulation. phase three will see the information sharing between participating banks when there is an update of customers'data for aml / know your customer compliance purposes or when a new customer is onboarded and such person is already a customer of a participating bank. finally, phase four will deal with information sharing between participating banks for the purpose of account switching. the cbc is committed to make the project

constantinos herodotou : navigating the technological revolution the central banker's perspective speech by mr constantinos herodotou, governor of the central bank of cyprus, at the 11th banking forum & fintech expo, nicosia, 7 december 2023. * * * ladies and gentlemen, esteemed guests, it is a pleasure to have the opportunity to speak to you at today's event, and i wish to thank the organisers for the invitation. in our increasingly digitalized world, technology's pervasive influence has brought about significant changes, particularly in the financial sector. the integration of technology into banking processes, has the potential to optimize operations, improve customer experience and redefine interactions between financial institutions and clients. the entry of fintechs and the expected challenge from big techs, has expedited these changes, using platforms like social media to influence retail depositors'responses to market signals. without a doubt, payments are being challenged by disruptive transformation and by the emergence of private actors that might lead to instability and confusion about what is money and what is not money. for example, the so - called crypto - assets are too volatile to be considered a currency or to act as a means of payment. stablecoins are often unbacked by any reserves to be considered as a currency, but rather seek to maintain a stable value through, for instance, algorithms or protocols. moreover, stablecoins are vulnerable to runs, as evidenced in may 2022 by the collapse of terra, which was the fourth - largest stablecoin at the time. another example occurred in march 2023, following the failure of silicon valley bank, by investor runs on usd coin – the second - largest stablecoin. ladies and gentlemen, as bigtechs are further expanding into digital finance, there are risks to our payment system, as well as to our monetary and financial stability, especially from a potential issuance of their own currency. this is not mere speculation, as evidenced by the decision of paypal to launch its own dollar - denominated stablecoin. paypal has a user base 1, 3 times bigger than the eurozone's population therefore such a venture poses challenges at least under three areas : a ) firstly, to the functioning of our payment system. stablecoins are structured as'closed - loop solutions'that restrict payments to users who adopt a particular payment tool. b ) secondly, if citizens prefer to use