observing : digitalisation, declining cash usage and the emergence of new forms of money. 2 trends in payments trend 1 : digitalisation our economy is growing more digital by the day. business processes are becoming increasingly automated and interdependent. complex value chains arise. the “ internet of things ” enables machine - to - machine communication. e - commerce and online services of all kinds are about to 1 / 4 bis central bankers'speeches experience an enormous uptake due to the pandemic. the pace of digitalisation has probably never been faster than today. these developments are increasingly calling for a safe and efficient settlement asset which can be seamlessly integrated into almost any kind of business process. trend 2 : declining use of cash parallel to this, we can see that the use of cash is waning, even in germany. the current pandemic has boosted not only the use of credit and debit cards, but contactless payments, in particular. in a recently conducted survey on payment behaviour in germany during the coronavirus pandemic, we found out that the share of cash transactions has fallen from 74 % to 60 % over the last three years. 2 admittedly, it remains to be seen whether the current behaviour also persists in the post - coronavirus period. but what we are currently seeing is quite a considerable change for a country which is strongly accustomed to paying in cash. trend 3 : emerging means of payments other than € another trend is the emergence of new forms of digital means of payments. these can be central bank digital currencies issued by foreign central banks as well as privately issued means of payment such as stablecoins. at the moment, these alternative means of payment are still in the development or testing phase. however, given the speed at which technology is developing, their widespread adoption might be far less off than we think. should these forms of money become widely used as a medium of exchange or store of value in the euro area, significant implications could arise : for the role of the euro or the payment industry, and consequently also for financial stability. 3 central banks need to be prepared the three trends i have just outlined highlight that, if the payments ecosystem is going to expand, central banks need to be prepared. as highlighted in the report by the bis and seven central banks, central banks need to be in a position to make an informed judgment when it comes to the decision on a central bank digital currency. 3 any dedicated central bank digital currency should be designed carefully

##nearly triple the number imposed in 2019. and many firms around the world are reorganising their supply chains and are considering re - shoring, near - shoring or friendshoring. so while global trade is still resilient, we are already seeing more and more cracks appearing under the surface. in today's interconnected world, the prospect of geoeconomic fragmentation looms large over nations like indonesia and the netherlands. indeed, our economies thrive on international trade, with each other and with the rest of the world. the cost of geo - economic fragmentation comes in different shapes. further geo - economic fragmentation and trade restrictions reduces the efficiency in the allocation of resources and hinders the diffusion of innovations. this will add to global price pressures and lower productivity growth. recent imf estimates state that trade fragmentation could reduce global gdp volume by between 0. 2 % and 7 %, with countries that rely more heavily on international trade being more susceptible. as a central bank, we are also concerned about geo - economic fragmentation affecting financial stability, particularly through its impact on financial institutions. for example, disruptions in value chains and their impact on economic growth and inflation can lead 2 / 4 bis - central bankers'speeches to an increase in banks'market and credit losses. moreover, a tightening of financial conditions because of geo - economic fragmentation may increase vulnerabilities in the banking sector as risk premia rise. perhaps the most important way in which fragmentation impacts financial stability is when we cannot find each other anymore when facing important cross - border challenges. and there are many such challenges. during the global financial crisis of 2008, policymakers around the world were able to respond swiftly and effectively. this was possible thanks to good relations among public - sector financial decision makers and solid institutional structures that had developed over the years. after the crisis, countries around the world, assembled in the g20, took the lead in hammering out a firm package of financial reforms. in a fragmented world, such a swift response is becoming more complicated. this could prove costly. that's because the most important challenges to financial stability that we currently face are precisely the crossborder issues that we can only solve if we work together. think of climate change, for example. to overcome these challenges, we need to foster collaboration between countries and emphasise the importance of an international rule - based order. a fragmented world demands stronger international collaboration to prevent the costs from outweighing the benefits. what we need today in