afraid to “ learn by doing ”. the banque de france is now engaging with the innovators from the private sector to conduct a program of 8 experiments, with a view to integrating a wholesale cbdc into innovative procedures for exchanging and settling tokenized financial assets. the expansion of the bis innovation hub with the establishment, in paris and frankfurt, of the eurosystem centre will definitely accelerate the collaboration among central banks in innovative financial technologies. • we, the ecb and the eurosysteme, may decide to issue a money in digital form. let me be clear : we cannot allow ourselves to lag behind on cbdc. that may mean that we create if necessary a retail cbdc, in order to ensure the accessibility of central bank money for the general public, in particular in countries where the use of cash in payments is declining. and / or it may mean that we europeans may decide to issue a wholesale cbdc, with the aim of improving the functioning of financial markets and institutions. within the eurosystem, the ecb has established a high - level task force to prepare a comprehensive analysis of the possible benefits and challenges related to retail cbdc, to be discussed in coming weeks within our governing council. • in this journey, we must set up appropriate synergies between public and private actors. unequivocal support should be given to the european payment initiative ( epi ) : this project is essential for the safety, the rapidity and the european sovereignty of payments. success of epi is determined by ( i ) access to a large customer base, ( ii ) adherence of large merchants, and ultimately interoperability should epi have ambitions to develop outside of europe. • let me stress there is no contradiction, as sometimes feared by commercial banks, between considering a euro - cbdc and supporting epi. we may probably need both, and build complementarity. my preference would be to seek a renewed public / private partnership for the dissemination of central bank money in a retail form. possible impacts on the banking sector could be reduced with different tools : for instance, limiting the quantity of digital euro in circulation would prevent excessive shifts of commercial bank money into digital euros. for the eurosystem, this strategy would imply to clarify the interplay we would like to put in place between epi and the cbdc, thus validating an intermediated model while providing enough customer proximity and value added to intermediaries ( like front - end solutions ). 2

##kits, aligning them with the new generation of business models and technological solutions brought about by fintech. in recent years, similar formats for regulator engagement with the industry have sprung up widely – from canada to australia. arguably, these developments mark a shift in authorities ’ thinking – facilitating innovation instead of aiming to restrict it. in this regard, the idea of developing a central bank digital currency has recently been gaining traction. the task of issuing a central bank digital currency is indeed complex and requires extensive long - term efforts. yet it also offers substantial gains. these include increased transparency, more efficient payment and settlement systems and enhanced instruments for financial risk monitoring. with more flexibility come new responsibilities nevertheless – and here i have to put the strongest emphasis – with more flexibility come new responsibilities. while becoming more open to innovations, we – i mean both industry and regulators – cannot turn a blind eye on the associated risks. first of all – cyber risks, which, under intensifying digitalisation processes, attract elevated regulator attention. financial institutions increasingly base their operations on novel technological solutions, such as cloud computing. this certainly brings efficiency gains. but also makes financial firms more vulnerable to hacking and malware, placing vast amounts of data and critical ict infrastructure in a potential danger zone. today this challenge is particularly relevant in europe due to the ongoing regulatory shift towards ‘ open banking ’. it is therefore no surprise that international standard setters, such as the bank for international settlements, have recently become more active in this domain. as a result, today financial institutions and regulators are offered guidance – including the recent steps taken by the european central bank – that they can implement to enhance the level of cyber resilience. to strengthen these efforts, the international monetary fund has lately been putting more emphasis 2 / 4 bis central bankers'speeches on cyber risks within its surveillance and policy advice frameworks. nevertheless, digitalisation - induced risks for the financial system stem beyond cyber threats. financial innovations also tend to create additional room for ‘ shadow banking ’ to expand. it takes time to identify and fully understand these new and often obscure financial services, sometimes revealing regulatory and supervisory loopholes. through interlinkages with other financial institutions, this may eventually lead to a build - up of hidden systemic risk. in other words, in absence of adequate regulation, ‘ shadow banking ’ operations risk putting the whole financial system under threat. in the last several years, we have witnessed an increase in scrutiny towards ‘ shadow banking ’ activities on a global scale