underlying income flow or productive value. they cannot function well as money. notably, they suffer from the same problem as monetary gold in that their supply is not responsive to the needs of the economy. their value is anything but stable. page 5 of 8 in contrast, i believe that we cannot rule out the potential of stablecoins. if the digital part of the economy is migrating on to dlt based networks and platforms, money based on these technologies could end up playing an important role. issuers of stablecoins promise to deliver stable value of a crypto - based asset by backing these with safe assets from the traditional monetary system – e. g. us dollar assets. the business model of a stablecoin can thus be likened to that of a bank deposit, only that stablecoins are based on crypto technology, and – for now - lack proper regulation and deposit insurance. sound regulation is a necessary condition for stablecoins to function well as money in future dlt - based environments. issuers should be regulated according to the services they provide – money or settlement balances – and the risks associated with these services, rather than according to the technology used to deliver it. this would also ensure a level playing field in which different business models – e. g. commercial bank deposits and stablecoins – can soundly compete on delivering value. the upcoming eu - regulation of markets in crypto assets – or mica – is an important step in the right direction. 3. the question of cbdc the shift away from cash and the rise of blockchain and crypto raise important questions for central banks. one of these is whether we should issue central bank digital currency – so - called retail cbdcs - directly to private citizens. let me offer some reflections on this question. page 6 of 8 first, it ’ s important to distinguish between retail and wholesale cbdc. a retail cbdc is a digital deposit issued by the central bank for private citizens and companies. the term wholesale cbdc is often associated with dlt - based central bank reserves accessible for financial institutions. issuing wholesale cbdc is a question of technology. we already issue central bank reserves, which are wholesale digital central bank money using traditional technology. supplementing this with dlt based wholesale cbdc may at some point become necessary or desirable, for example if dlt and blockchain based technology becomes pervasive in economic networks and platforms. or because dlt based wholesale cbdc may enhance inter

, however, where it has become increasingly common to buy housing with a view to subsequently sub - letting it. examples of financial stability report 2003 : 2, figure 2 : 20. this are the uk and australia, two countries that have tightened monetary policy during the past half year, referring explicitly to price developments in the property markets. monetary policy and asset prices i would like to round off with some reflections on an interesting discussion that has been going on for some time among researchers. the discussion is about whether central banks should attempt to influence asset prices. the generally low level of interest rates in many countries, and in particular historically low key interest rates, have together with the stock market bubble during the second half of the 1990s helped to raise a discussion about monetary policy and asset prices. 3 at present, low inflationary pressures coupled with low interest rates have resulted in large volumes of liquidity in the world economy. there is quite simply a lot of money in circulation. this money has to be invested somewhere, and the major beneficiaries have been the world ’ s asset markets such as equity and bond markets as well as property markets. in combination with improved corporate earnings and increasing confidence that the economic upswing has taken root, this has led to steep rises in these markets in the past year, notably in equity markets. the discussion is about whether central banks can and should attempt to stabilise asset prices, which are not included in the cpi. the advantage of such an approach, given that the central banks should succeed, would be stabler real developments thanks to the fact that household consumption and business investment would be stabler if bubbles in the equity and property markets could be avoided. as stability is an important objective for all central banks it is an attractive idea to try to limit the emergence of prices in these markets that deviate substantially from those warranted by fundamental economic factors. as in so many other situations the problem is that this is easier said than done. firstly, the central banks have to identify when a bubble arises. in other words they have to be able to distinguish between what is warranted by fundamentals and what represents unreasonable expectations of continued price increases. secondly, once a bubble has been identified, the central banks have to be able to “ burst ” it. asset markets are indeed sensitive to the interest rate situation, but it is possible that it would take such large rate adjustments from the central banks to neutralise a bubble that the negative effects on the rest of the economy would be