 Good afternoon, ladies and gentlemen. Thank you for inviting me. Yes, I was the professor of Mr. Wingen. And some years ago, he couldn't escape my lectures. And now I couldn't escape his invitation. I feel really honored. And the other reason, probably, why I'm here is that some years ago, I wrote together with my co-author Ulrich Wastman this book on a Bargeld for board. And the reason why we wrote it was that we met one of the warriors on a cache, Kenneth Rogov, here at Munich University. And now for today, my task is digital cache as potential opt out from substantial negative interest rates. And there, we have to ask ourselves, well, in recent years, we see a war on cache. And this war on cache is connected, among other reasons, to make negative interest rates possible. Now the question is, is this a real threat? So do we have to think about this? Do we have to reflect it? Well, and when you look at the interest rates, I will do it very fast. Then you'll see that the main refinancing rate of the ECB is zero. Now it has been zero for several years. Yes, OK, the US has increased recently. But now it seems to be that we are on top. And the next steps might be to lower it again. At least United States has a possibility to lower interest rates. And when we are at zero, we have this topic of the zero lower bound. You cannot significantly lower interest rates below zero without facing the danger from the perspective of the banks that the deposits will be withdrawn and people will start to hoard cache in order to avoid negative interest rates. It might not happen at minus 0.2, minus 0.4, but Kenneth Rogoff, one of these warriors on cash, is talking about minus 6%. And in this case, it will be quite clear that the vast majority of depositors will go and withdraw their cash and hoard it in order to avoid these negative interest rates. So even when we look at 10-year government bond yields, they are in Germany and Japan at the moment at zero or slightly below zero. So even their long-term interest rates are coming to zero. And here we have it in the longer perspective. We also see a clear trend from 1980 to lower interest rates. Now there is a dispute going on. Is it due to the monetary policy of the central banks or is it more to lower birth rates, lower gross rates, or whatsoever? But for the topic I have to deal with, this is not so important. The simple fact is important that we are at zero or even below zero. Kenneth Rogoff, Harvard economist, former IMF economist, prepare for negative interest rates in the next recession. So and sooner or later, there will be a next recession. Larry Summers, also Harvard economics professor and secretary of finance and Bill Clinton's administration, negative interest rates might be necessary to push the economy, so to push investment and consumption. The existence of cash limits the possibility to impose negative interest rates. So and then it's quite clear if this is your conviction, then you have to advocate for the end of cash. In Germany, we have Peter Boehringer. He argues in the same direction as Rogoff and Summers. Still among German economists, he is in a minority, but the question is, will this also be the case when we have a long lasting next recession? And in January 2016, John Grein, the meanwhile former CEO of Deutsche Bank, said cash I think in 10 years time probably won't exist, there's no need for it. It is terribly inefficient and expensive. So even from this position, you'll have clear arguments against cash. When you look into the IMF working paper, I think some of you might know it from last year by Katrin Asenmacher and Siegne Grockstrup. The title was monetary policy and this negative interest rates and will this mean somehow that you have to get rid of cash? And that says in the abstract monetary policy space remains constrained by the lower bound in many countries, limiting the policy options available to address future deflationary shocks. The existence of cash prevents central banks from cutting interest rates much below zero. In this paper, we consider a practical feasibility of reason proposals for decoupling cash from electronic money to achieve a negative yield on cash which would remove the lower bound constraint on monetary policy. We discuss how central banks could design and operate such a system and raise some answered questions. So they also have an option, for example, if it's not possible to get cash away, then it would be that you have an exchange rate between cash and the deposit money. So this means that when you have 100 euros and then you come to a discount and you pay, then they say, oh, it's only 98 euros value. So because they include the negative interest. On page 19, in the same working paper, you find the quotation, another behavioral question for the transition is whether the introduction of a dual local currency system would send a crisis signal that could erode trust in the central bank and perhaps lead people to switch to other forms of currency for their payments, such as foreign currency, gold, or even cryptocurrency. We already see marginal shifts for other reasons in the types of means of payment used in many areas of the financial system. However, individuals seem to be unwilling to abandon local currency as a means of payments for most transactions. So you see they take into account that this could happen, but they still regard it as very unlikely. I would say this depends on how negative the interest rate is. If it's indeed only 0.2, 0.4, then they might be right. But I would say from 1% onwards to the negative, this won't be true anymore than a lot of people will look for alternatives. And the group of 30, a very influential group of 30 central bankers, CEOs of commercial banks and economists, they have an occasional paper. And there it says, in addition, when currency was introduced, keeping track of financial transactions and money flows was not an issue. One characteristic of cash, its largely untraceable nature, was largely irrelevant. Today, in a complex and largely global financial system, it is not. Governments and regulators have legitimate and compelling reasons, including taxation, law enforcement, and national security, to better understand money flows and financial transactions. It is no surprise that early adopters of Bitcoin were those with a reason or desire not to have their financial dealings observed by governments. Listen. OK, what are alternatives to cash? Cash of other countries, cryptocurrencies like Bitcoin, precious metals in coins, private currencies, barter clubs, self-sufficiency vouchers. You see, these are, in my eyes, the alternatives you can use. So lessons learned so far. There is a war on cash going on based on several motives. One warrior's motive, among others, is the absence of cash would allow to impose negative interest rates in order to boost consumption and investment. Negative interest rates are a kind of, and now this is a creation by myself. I'm somehow proud of this, Consume Verweigerung Steuer. When I used it for the first time, I checked it in Google. It didn't exist then. And then now I translated it into English for my English speeches. It's a tax on anti-consumerism. So in other words, you are a bad guy. You don't want to consume. We have to tax you. It is possible, is it possible, as a question, to escape negative interest rates by Bitcoin and other cryptocurrencies? Now, people have a look at this. The answer is basically yes. So my lawyer advised me to add the basically. The answer is yes. However, governments and central banks, and central banks are a government agency, are very likely going to repress or stop these alternatives, especially when they achieve a relevant size of what we have. Now, let's assume you can use it. I expect counteractions by governments. But now let's have a look at how would it be when we use it. And I want to use a very basic economic concept, the quantity equation. So M is a quantity of money. V is a velocity of circulation. P, the price level. And T, V is a transaction volume, the quantity of output. In most cases, the transaction volume is replaced by the GDP. And somehow this is possible to replace it. But I think for what we are looking at now, we want to look at the transaction volume. Now, for those who are not familiar with economics, I want to explain it in very simple words what it is about with velocity. The velocity is the speed the money is running through the economy. When you go to the gym and you go for 30 minutes on the cross trainer, then the volume of your blood doesn't change. But the organs in your body need more oxygen. And this is achieved by a higher velocity of the blood running through your body. So this means that in the same unit of time, more oxygen is transported there. That's why the velocity is important. In most textbooks, you read that in the long run, the velocity is stable. When you look at the development of the velocity in the last 20 years, it is definitely not stable. Of course, you can always look at it in 100 years and say there's somehow an average. And indeed, from the 60s to the 80s, it was relatively stable. That's right. But from the 90s, we have a reduction in the velocity. So now let's adopt this concept. We have M and let's say it is fixed because this is especially true for a Bitcoin. This is a difference to a gold standard. So the volume of gold is increasing, I think every year by some 1.5%. But Bitcoins, this is absolutely fixed. 21 million and then it's the end. So it is fixed. Now the transaction volume. And why I'm taking here the transaction volume because especially in this period of transition when people are using more and more Bitcoin, I think it's more important to take the transaction volume here because this transaction volume will be only a small part of the whole transaction volume. And you can translate, you can connect, sorry, you can connect the transaction volume in an economy to the GDP if it is done with one currency. But here we have different currencies. That's why let's take here the transaction volume for which Bitcoins are used. So this is increasing and I think we can say it is increasing in a very strong way. So high gross rates, offset transaction volume for which Bitcoins are used. That's why two errors. Now that the equation works, we somehow have to compensate it. And the compensation, and we have heard this this morning from Torsten Polight, would be a deflationary process. Prices have to go down. You have a limited volume of money, 21 million Bitcoins. Your transaction volume is increasing. So how can you manage it? Okay, the price level is going down. And or you can compensate it by a higher velocity. The money is flowing faster. Now a higher velocity, and I'm quite convinced both will happen, price level will go down, but the money will flow faster through the economy. Higher velocity is connected to higher interest rates showing higher opportunity costs of holding money. The higher is the interest rate, the higher is the opportunity cost of holding money. Why is the velocity going down at the moment? Interest rates are very low. The opportunity costs of holding money are zero at the moment, more or less zero. Some years ago, or 10 years ago, you still got some 5 or 6% on a cash account. And now it's normally zero. So that's why the opportunity costs are low and the velocity is low. But when the interest rates go up due to the scarcity of the Bitcoins, then the interest rate will go up showing the scarcity of the Bitcoins. Interest rates and the Bitcoins system, normally in economic theory, the interest rate is connected to long-term economic growth and what is itself connected to an increase in productivity and time preference. We have heard about time preference also from Thorsten Pauli. Negative interest rates are impossible in the Bitcoins system. So this is a difference to the fired money system. No one would lend money for a negative nominal interest rate in such a system. I couldn't imagine. So probably in a discussion, if someone has another opinion, we can discuss it. This means negative nominal interest rates cannot happen in such a free-market system like the Bitcoin. So conclusion, lessons to take with you. An end of fired money's cash and its consequences will make cryptocurrencies like Bitcoin even more attractive and more expensive. Bitcoin can be used for escaping negative interest rates in the fired money. The price of Bitcoin will increase in the case of negative interest rates in the fired money system. Interest rates in the free-market Bitcoin system cannot be steered like in the fired money. So in the Bitcoin system, negative interest rates are not possible. The more Bitcoin is used, the lesser its volatility will be. This is something which is at the moment still a hurdle for someone who wants to use Bitcoin as something for saving money. Then it's really a problem if the fluctuations are so strong. But the more it is used, the lesser the volatility is going to be. Cryptocurrencies can create a separation of money and state as we already have one between church and state. Thank you very much for listening.