 When the organizers invited me to introduce this panel, I understood I had to speak 45 minutes. But I've just realized I have to speak four to five minutes. So I will adjust my speaking notes. Anyway, so welcome to this session on central bank digital currencies. I wish to warmly thank the panelists Cecilia Skingling on my right, Nea Nerula on my left, Marcos Brunermeyer, and last but not least, Urik Binsail, who was kind enough to accept a last minute invitation to a virtual participation due to the fact that John Connallyff could not participate due to earth reasons. Our panelists are, of course, very well known to experts in the field of digital finance, but I will still briefly introduce them. Marcos is a professor at Princeton University, Cecilia is deputy governor at the Swedish Central Bank. Nea is director of the Digital Currency Initiative of the MIT Media Lab, and Urik is director general for payments and market infrastructures at the European Central Bank. Let me emphasize that this is a dream team for CBDC. This is a unique group of experts, and I'm sure we will have an inspiring session. My role here is only to say a few words to introduce the topic, again, four to five minutes. The discussion on CBDC originates from the digitalization of finance. Digitalization is transforming the financial sector, bringing value added, but in many cases, it is just used as a marketing tool to promote speculative instruments. As we now know, cryptos, which are the case in point, cryptos initially prosper on the fear of missing out only to crash later. And the reasons now have become clear. Cryptos are subject to health behavior. According to surveys, one third of crypto investors knows very little or even nothing about the assets they are buying. Also, cryptos are prone to bubbles. In recent weeks, the two largest cryptos, bitcoins and Ethereum, have lost most of their value. Several stable coins have lost their peg, and some of them have even disappeared, literally disappeared, in some cases, literally, because the founder disappeared with the money. But the expansion of cryptos has been for center banks, a wake-up call. It has made clear in the center banking community that if we do not satisfy the demand for digital innovation, others will. And if we do not provide the public sector anchor to digital payments, we may end up with volatility, instability, and confusion about what is digital money and what is not digital money. It is therefore not surprising that today, 100, according to the BIS, 105 center banks around the world, representing 95% of global GDP are exploring CBDCs. So why are they doing this? Why are center banks increasingly involved in CBDC projects? My view is that by working on CBDCs, center banks are simply responding to the evolution of societal needs. In fact, the increase in digital payments shows that people's demand for means of payment is rapidly adapting to the digital era. In some countries, the decline of cash is accelerating in a nonlinear way. Therefore, for a central bank, certainly for the ECB, the most compelling reason for issuing a CBDC is to ensure that public money, central bank money, remains widely accessible in the digital age, preserving its role as the anchor, the numerator of the payments system. Other objectives are, of course, relevant. Discussions range from the need to improve payment efficiency and security, to ensure financial stability, to improve financial inclusion, and address risks of large-scale adoption of private or foreign currencies. But even if we achieve these objectives, we cannot take the success of CBDCs for granted. To be a success, CBDCs must respond to the needs of people in their daily lives, offering inefficient, user-friendly, cheap, easy-to-use digital means of payment that people can use everywhere for their daily payments. And CBDCs must, of course, be designed and introduced in a way that preserves the crucial role of private financial intermediation and stimulates private innovation. So this is a daunting task, and I'm lucky enough that today I don't have to answer the awkward questions that you usually get when you start discussing this topic. Do they have the luxury that I can ask questions? And my friends here are supposed to answer. And we are lucky that we have a panel that can address the multiple facets of the digital transformation journey that central banks are embarking on. So if the panelists agree, I would start Cecilia with you. No, no, you, you. So a key question that many are raising, Cecilia, is that the impact of CBDCs on financial markets is unclear at best. How can a CBDC be made attractive enough, but not so attractive that it crowds out marketplace? Thank you, Fabio, and hello to you all. So it's about finding the Goldilocks version of a CBDC, really. I think there are two dimensions we have to consider here. CBDC, on one hand, as a payment service. On the other hand, CBDC as a money, because the crowding out challenges look quite different in these two dimensions. And let me start with CBDC as a money or even a store of value. So CBDC as money relates to the CBDC as a means of payment and store of value. And here, CBDC competes with bank deposits. And look at what makes CBDC attractive as a store of value. We should focus on tools such as interest rates and caps. And these are the kind of tools that central banks are looking at to steer CBDC demand. And I think the central banks actually have the tools that they can use to make sure that CBDC in its money form does not come out private money. It was also interesting enough the conclusion in a report written by seven central banks that collaborate on these issues in a report that was published in September 2021. You can find them on the BIS webpage. And it has the governors of the Federal Reserve, the ECB, Bank of England, Bank of Japan, et cetera, others underlining the agreement that central banks can handle making sure that CBDC as money is attractive but not too attractive to society. Now the other aspect of this is CBDC as a means of payment. What really makes the CBDC attractive as a means of payment is the side of how liquid it is, how easy it is to use it in the economy, and how easy it can be transformed into desired goods and services. And here we are thinking about convertibility, how the network effects is, how easy it is for citizens to transform CBDC into other forms of money. One important part of this is the legal aspect of a CBDC. This is not a venture that central banks can do on their own, is my belief. Money, as at the end of the day, very much a question of values, of social values. It needs dialogue with the politicians, and it needs a clear legislation framework. And the issue is it going to be a legal tender or not? And if it is a legal tender, does it actually have any real content in this world, or is it just words? It's going to mean a lot of difference whether CBDC works as a means of payments or not. And in this area, I think it's actually going to be a bit more difficult for central banks to sort of calibrate the attractiveness using CBDC as a means of payment. We have to think about the rulebook where the CBDC is working from a platform and how we decide on convertibility to other types of money through the design. And in any case, there is a risk if a CBDC is very popular, could crowd out other payment services. This could be bad, but actually, it could also be good. To my knowledge, all central banks, I'll elaborate a little bit on that, all central banks that are considering a CBDCs, they are looking at a distribution model that have intermediaries providing the various payment services to the general public. And here are central banks, if we're thinking about designing such a platform, we face a trade-off. To what extent should we steer the design of these services? We want the private sector to innovate, and then they need to have the freedom to do so. But it also means that the central bank loses some control of the CBDC service and ultimately how attractive they will be. So potentially, if we allow for a very open level of innovation, one private sector innovation could, at least in theory, crowd out other private services. But on the other hand, if we limit the freedom to innovate, we may end up with a very unattractive CBDC. So finding this Goldilocks zone for the CBDC, where it's not too small and not too large, it's not easy. But I think it's not nothing, anything that really keeps me awake at night. I think we cannot pin down all the uncertainties beforehand. We cannot control everything, and we are certainly not doing that already today, so we shouldn't expect that in the future. I think as we move along, and some countries are already considering, and somehow should actually already introduce them, I think the changes would be pretty gradual over time, then therefore we will have time to react, and I think there are pretty good tools in our toolbox to do so. Thank you very much Cecilia. So it's a complex task, but we know how to handle it. At least we hope. Let me now turn to Ulrich from Frankfurt. I hope Ulrich, are you connected? Yes. Yeah, I can tell you, yeah. Good morning Ulrich. How do you see the role of CBDC in achieving broader policy objectives, such as competition, innovation, and inclusion? How relevant is the discussion on these topics in the euro area and worldwide? Yeah, thank you, thank you Fabio. Yeah, those are, I would say important, objectives on top of the anchoring role of central bank money through CBDC in a digital age. And let me first say some words on competition and innovation and then on inclusiveness, which is a bit different. So for the ECB, the commitment to competition and innovation follows directly from the EU treaty, and efficient and reliable means of payment are the very basis, what would say of modern society and innovation and competition are key to achieve efficiency. And one could say, innovation has been impressive in electronic payments over the last decades. Competition, not necessarily so, because payments is a network function which leads easily also to market concentration and then to possible abuse of power by the leading providers. And I would see two implications of that for CBDC. The first one is that CBDC in itself, in a purely digital world, helps as it is a competitor, which will limit the potential abuse of market power by dominating private providers. So CBDC will be one fallback solution and that limits even the market share of the most dominant providers and people can fall back on CBDC. And CBDC should be cost-free for the digital euro that was set for the citizens who use it. And it can be I would say competitive and cheap because of the economies of scale that we can realize. And the second implication is that CBDC should be designed in a way to support the development of a surrounding innovative and competitive ecosystem. CCIA has a unit to that. So distributors acquire a service provider that of all kinds should be incentivized to support CBDC through a good business model that attracts them and that keeps openness for entrance into those various services where innovation is rewarded by playing then an important role. I mean, if more generally on innovations, remarkably for bank notes, one could say that technology remained pretty stable for 350 years, not technology in terms of security features, but for all the rest, this was quite stable. But that is unsinkable in the field of electronic payments as we have observed it. It's a constantly evolving and still improving field. And again, this speaks in favor of CBDC being embedded in a competitive ecosystem where the innovation will be brought through openness and competition of service providers. So that precludes a model where CBDC is a completely separate solution run by the central bank and then always lagging behind the market innovation. And just a few more words on inclusiveness, if you allow. I mean, there are some areas in the world where the role of CBDC in that field is totally obvious. Namely, if you have a low share of banked people, but people having mobile phones allowing for mobile payments of CBDC, countries like Nigeria can really, their CBDC makes a huge difference for financial inclusion, but also for advanced economies like Europe. It's an important topic. I mean, inclusiveness has been part of our retail payment strategy of the commission as well. ECB has taken into account inclusiveness for bank note design ever since the launch of the Euro and also the European legislator has made inclusiveness in payments, important like through the bank account directive. So it's not a question that also the digital euro should aim at inclusiveness, in particular for the scenario where bank notes usage would be marginalized, not because we want that, but because society moves in that direction. And then CBDC must also fill the gap that bank notes allowed in terms of inclusiveness and that, of course, will cost some money. There's a need to think about the form factors. What cards do you may want to provide smart cards? To people, I mean, what customer support do you need to ensure inclusiveness? So that has to be planned and in particular for the phase later on one day where indeed the use of cash has been marginalized to the extent that it no longer can play this role. Thank you. Thank you, Ulrich. Let me now turn to you, Marcus. One of the most debated issues in relation to CBDCs but more generally in relation to digital payments is privacy. So my question would be, how can we deal with the natural tension between the strong wish for privacy from the general public on the one hand and the public interest in maintaining the level of transparency required to combat illicit activities such as AML, CFT or any other. Thanks a lot, Fabian. Thanks a lot to the ECB team for inviting me. It's a pleasure to be here. So privacy is really one of the key issues. It's also very related to what Cecilia was talking about whether a CBDC will be successful or perhaps too successful and you need a certain degree of privacy for people to accept a CBDC. And money is about trust and is about coined freedom. So it's freedom, you can choose what you do and nobody can interfere with that. So privacy is really very important. And if you think about cash, what's special about cash? Cash is free of a ledger. There's no ledger where anything is written down. And what's special about digital money, it always has a digital ledger behind it. So while for cash, we don't need any regulation, we don't need any governance structure except that if you spend more than 10,000 euros, you have to record it. But if you don't do any regulation, it is guaranteeing privacy. For digital money, it's exactly the other way around. In order to protect privacy, you need a governance structure and you have to intervene. And that makes cash so different and CBDC is so different. That's why one has to clearly think about how to design that. And so if you think about on the other hand, what's the big advantage of digital money? Of course, we all move much more to a virtual world. I mean, cash becomes less and less useful. But the big advantage is actually of digital money that you can combine it with some other ledgers and you can make some condition payments, automatic payments, smart contracts as Richard was talking about yesterday. And that means your ledger has to be interoperable with some other ledgers, meaning other blockchains, supply chains, some other elements to that. In Europe, the focus is very much on consumer focused. It's related to consumers, but you should also think about supply chains. So think about a world in the future. The automotive industry will have, for example, a supply chain. The textile industry has a B2B platform supply chain. And they all have ledgers. They have a payment rail to it. So there's whenever there's a certain widget from one factory moves to another factory or some engine or whatever this is, there will be a sensor on these widgets and this will be recorded on this supply chain ledger. And then the payment will happen automatically and the payment will be attached to a token. And then the question is what currency will this token be denominated in? Will it be the dollar? Will it be the euro? And if you have a separate ledger, if you have a CBDC, how interoperable is the CBDC ledger with this various supply chains? And as it plays out now, probably, there can be stable coins denominated in the dollar and then there will be all denominated in the dollar or you have some smart CBDC arrangement where there's some CBDC ledger interacting with the private supply chains. But it also means it's much harder if you have all these interacting ledgers to keep privacy and how to design privacy. And essentially you can think of as you make all these ledgers interoperable to a meta ledger or some universal ledger, there's no privacy at all. So for privacy reasons, you would like to split this apart, this meta ledger in some jigsaw puzzle and everybody gets only one piece of it in order to protect the privacy. So on the one hand, we would like to connect everything in order to have programmable money or programmable wallets rather than money because you want to preserve the unit of account role, you don't want to programmable money, you want programmable wallets and you want to have everything connected to this meta ledger. But for privacy reasons, you would like to split this meta ledger in a jigsaw puzzle and everybody gets only access to parts of the puzzle. And that will be the big challenge, how to design, conceptually think about this meta ledger and how to split it up and who gets access to what element to that. And in particular then keeping in mind, fighting crime, privacy and crime is always connection, how much privacy they want to give, how much freedom they want to give and how much they want to be able to prosecute crime. And this is actually the big challenge we are facing there. And more generally, if you think about the value of information people have, what's the social value of information and what's the private value of information? It's not the same. So you should have privacy for your own DNA. You should have privacy for your own X-rays. But should you have privacy how the X-rays translates into some certain health issues, how your DNA translates into certain cancer probabilities? That's not clear. So we have to have, on the one hand, you would like to give certain people or certain institutions access to the correlation structures of various DNAs and the cancer probabilities. But on the other hand, your individual DNA should be protected. And that makes it challenges to how to design and how to approach the privacy more generally because the social value and the private value is so different. And people also suffer from the privacy paradox that they say they care a lot about privacy, but when they have to give it up to some company, they're very easily given up for a low amount of money. And finally, let me just raise one more issue about CBDC. There's a question, come back to trust. Money is about trust. It's a part of the social contract. And that's why politicians have to be involved. The parliament has to be involved. The product group has to be involved. And do people trust more the official sector or do people trust more the tech companies? And you have to have a certain governance structure to make sure that they trust more the official sector and that everything is run smoothly. So I'm raising more questions than answers, but it's just, it's a complex issue. Because the privacy issue is a much broader issue than money, but money is one of the core elements to that. Absolutely. Privacy turns out to be the most important feature of CBDCs in all surveys, including the ECB survey that we conducted two years ago. Nea, you are a super expert in technology. And my question would indeed focus on technology. A burning issue in the CBDC debate is the debate, the relevance of choosing between centralized and decentralized technologies. So my question would be, what are the trade-offs between a blockchain and a traditional centralized infrastructure to operate CBDCs? And second, how important is that CBDCs can be used offline? And do we have the necessary technology to allow users to use CBDCs offline? Thank you, Fabio. And thank you to the European Central Bank for having me at this event. So technology is vital. But I want to make an important point, which is that we shouldn't necessarily begin the conversation with which technology to use. First, we should focus on why CBDC at all. What are the social and policy goals that we might be trying to achieve? Then, what are the monetary choices and design choices needed to achieve those goals? And then, what are the technology options in order to implement those monetary and design choices? However, as a technologist, I have to say that technology work should be done in parallel with this process. Because in part, the technology determines what is even possible. So what we can even do, you need to understand what tools are in your toolbox. And in order to do that, we need to do technology experimentation very early on, rigorous technology experimentation. We need to create what I call a technology policy loop, where we bring technologists and policymakers together to feed into each other and move the work forward. So to answer your question, Fabio, about centralized versus decentralized, I want to be clear. CBDC does not require a blockchain in order to operate. Blockchain technology, the way I like to think about it, is that it is an umbrella term under which there are many different components. And we can actually pick and choose which components make sense for the goals that we're trying to achieve. So for example, we can get the features that we normally see in cryptocurrency systems, like programmability or cryptographic designs for privacy or auditability or real-time settlement finality, without necessarily using a core component of DLT systems, which is the underlying distributed agreement. So just to talk about that for a moment, these systems, the distributed agreement component, are really designed for situations where there is no central body, there is no single organization that governs the system. And you have to note that in the word central bank, digital currency, you have the word central right there. That's an important word. DLT technology might make more sense in contexts where there isn't a central governing body, where it really is a situation where you have multiple bodies that need to come together, and they can't create a central intermediary to do that governance for them, and they want to embed the rules of the system in the software. But just because we're not using the distributed agreement doesn't mean we can't use these other very interesting parts of blockchain technology as components. But CBDC, beyond the technology choices, is also a structural choice. What are the core platform services that should be operated by or for the central bank versus what should be done by various intermediaries? And I want to make a point here that to date we've been using a fairly oversimplified model where the pictures will have a central bank, and then they will have sort of a vague PSP or payment services provider. But in fact, there will probably be a very wide variety of potential intermediaries, and they will take on a wide variety of roles, sometimes perhaps in cooperation, to achieve what traditionally might be done by a commercial bank today. And this impacts quite a few policy trade-offs. So who will see what information? Who has what responsibilities? And how easy it will be to innovate on this architecture. Speaking specifically about offline capabilities, yes. CBDC should absolutely have offline capabilities. This is very important for robustness. For example, to tolerate natural disasters, which might knock out communication infrastructure, but also for low connectivity areas, for example, in emerging markets. We often use the phrase digital cash to describe CBDC, and I actually think this is a great framing. I think it's very helpful. We should think about approximating some of the more useful properties of cash, like that it works offline as an example, but also that it does not require an advanced mobile device, and it does not require someone signing up for an account with a private company or signing a terms of use in order to be paid. We should also think about what we can do beyond cash. So cash is a useful starting point, but the technology can enable us to do so much more than that, like cryptographic designs for privacy or strong accountability. But to start, I would argue, approaching CBDC design from the perspective of creating a digital bearer instrument to have the best chance of achieving its promise. We have this opportunity where we can think creatively, and we don't have to be trapped by the existing paradigm of commercial bank accounts. Thank you very much. Thank you very much, and I am very clear. And I think we should now get closer to the economics of CBDC. And Ulrich, I would like to raise you a question on this. Another crucial question that is, how can I say, agitating financial intermediaries for legitimate reasons is, what implications could introducing a CBDC have on the banking sector? What would be the impact on financial stability? And how could negative side effects be best mitigated? Again, this is a very important issue that, as I said, for legitimate reasons, financial intermediaries are discussing quite incentivously. So it would be important to clarify this, Ulrich. Yeah, thanks, Fabio, for that question. And yeah, it agitates commercial banks, but it even agitated central bankers for a while. I mean, the term CBDC, if you go back to the early days where this topic is discussed, I think that the term was really invented. I'm not sure, but maybe by Michael Kumhoff from the Bank of England in 2016. And in his very first paper, he already talks about this topic. And then central bankers in this CPMI markets committee report of March 2018 also gave really big importance to this topic. And yeah, for understandable reasons, commercial banks are also very, very keen on this topic. So yeah, it's a no topic. I mean, now we are maybe more confident in the meantime. And Cecilia has already started to give answers what to do. So I think it's important first, as also Cecilia did, to distinguish the field of, I would formulate a bit differently, the store of value function of money versus the means of payment function of money. Both are functions of money. And in the field of the store of value function, yeah, the case is clear. You have in the euro area, maybe around 10 trillion of deposits with banks, which could, if CBDC is very attractive, also a store of value flow away. I mean, CBDC has a good competitive starting position in that field, because it is completely risk-free and completely liquid. But that is not what central banks want. Central banks don't want to crowd out all the central banks which introduce CBDC or which consider it, study it, I mean, emphasize it, don't want to crowd out banks. They don't want to see their balance sheet ballooning when introducing CBDC. So how to do that? I think amongst economists, and I understand this form, this is a form for economists primarily, but not only. Among economists, I think one can argue or start from the interest rate perspective. You could say, not normally of bank notes, is that regardless where the short-term risk-free interest rate is, they are always remunerated at zero, so that the store of value properties of bank notes are completely different if you are today, let's say in Turkey, where you have 14% normal interest rate or the euro area, where you have a negative interest rate at the short end. So that is unintended that bank notes have such different store of value properties depending on the interest rate level. So one could say for CBDC, this physical constraint is no longer necessary, and it could be considered. And remuneration would therefore also be a way to steer the relative, let's say, unattractiveness of CBDC as a store of value. And you can do that also through a tiered remuneration where you would have a certain limitation in the case of the euro area with negative rates as it is prevailing still now of a zero remuneration and then for large holdings, even a negative remuneration. But yeah, we don't live in a world of economists only, maybe fortunately, and lawyers, citizens, politicians, they get very skeptical and fearful if they hear about a non-zero remuneration, even of tiered remuneration of CBDC. And typically, those people, they see the point of limiting CBDC as store value, but it brings them quickly to the conclusion that limits an effective solution also in crisis situations. And actually, if you look at the CBDCs, which are currently being deployed, all of them or have been deployed, all of them have some quantity limits. I mean, in some cases, it's pretty high compared, let's say, to GDP per capita, but they always have some limitations because this point was seen and limits somehow can be explained are very simple, are effective. I mean, they're not beautiful, of course, because they limit the elasticity of the use. They also have the drawback that it's not clear how you calibrate them for corporate usages. So you have to be creative there what to do. But I think the fact is that those who deploy CBDC tended to choose limits on individual holdings. And I would say that works. There's no doubt that this works. That can be done. The limits should not be too low. At the beginning, deployment of a CBDC takes time. And you should not constrain it, in addition, excessively by very low limits. But OK, intellectually, this problem is not so complex. I would always pretend to say it is solved. You can do it at least through limits or through teardrum narration. And then the other more tricky question, and again, Cecilia has touched upon it, is the competition also with banks or maybe more with other providers in the field of retail payments, really. This is where central banks want to have CBDC being successful. Of course, again, not successful to the extent to crowd out others. We want to keep the coexistence of competition between central bank money and commercial bank money. And here, I would say, this is a more tricky part. There's no simple way to put a limit like you can have on holdings in payments. I have no doubt that CBDC can be designed in a way to be very successful. You can have a very low merchant fees. You could have legal tender status. You have those economies of scale. You have the credibility as a central bank. So you can make this very successful. But you can also fail. I mean, you said it, Fabio, at the beginning, the success of CBDC is not just fair or complete. It has to be achieved by a good design attractive for users and distributors, merchants. So hitting there the middle ground is more interesting. I'm sure it will be possible. I believe part of the solution is to give to CBDC some special unique features to, on one side, cover the big use cases, POI payments, because that's where the network effects come from. But then also seek to have it have some unique properties. It will never be so distinguishable from private payment instruments like banknotes where there the coexistence was very stable. It will always be more tricky to have a stable coexistence. But I believe that some distinguishability will be a key component of that. Thank you. Thank you, Ulrich. Thank you very much. So we have ways to address the fear of disintermediation by banks. Let me now turn to monetary policy. After all, this is a conference organized by a central bank, Marcus. What role could a CBDC play in the transmission of monetary policy? What features would be required to make CBDCs most effective and efficient in this respect? Yeah, I think that's a very important aspect of CBDC. And that depends very much on the design of the CBDC, which design feature one goes for. The first thing I would like to mention is that one reason to have CBDCs is also to overcome certain forms of fragmentation. So we see historically, if we go back in history, we had many, many currencies and bank notes floating out in parallel. And it was a big achievement to have a uniform currency, a common measure. And we see also in the digital space now a fragmentation of a lot of currencies. And what I argued in a report with Chopin-Landour for the European Parliament, that one big advantage of CBDC to have a uniform anchor and currency and avoid fragmentation also in Europe. And you shouldn't take it for granted because we saw a denomination risk in other things. And CBDC will be helpful in that. The second thing, of course, is how much monetary policy will it be more effective, less effective with CBDC in place? And that depends very much on the design of the CBDC. And one obvious thing is what Ulrich was mentioning too. Do you pay interest rate on CBDCs, positive or negative? And if you think about it, if you hike the interest rate right now, the deposit rate will not go up because the banks have some market power. So the deposit rate typically is lagging and is also falling. So that means whenever any tightening cycle will be translated with a delay, it, of course, will affect the loan market. It will affect the credits. But on the deposit and the savings side, it's not transmitting through directly one for one for sure. If you have a CBDC, which is also paying an interest rate, the transmission will be much more direct. And the market power of the banks would go away. And that's which typically the market power is very low when the interest rate of the central bank is low and is going up when the interest rate of the central bank is high. And that also leads the banks to have a different maturity match because, essentially, market power moves up whenever the Fed hikes interest rates or the central bank is hiking the interest rates. It also has implications. So the market power, the question is what's the reason why we should actually grant market power to the banks or to what extent we should grant market power to the banks? And that determines how much the CBDC interest rate should also move with the policy rate. Should you also go negative? And that's another thing. It might make the CBDC very unpopular, so it might get less attractive to things. But you might be able to get around the zero lower bound or the reversal interest rate. So in this sense, there are many aspects where you can go around it. But it also opens up a lot of opportunities, but it also opens up whenever you have a lot of opportunities, there's also a lot of potential to abuse it, so you can be way more effective in terms of financial repression. So you can actually implement measures which impose a much higher inflation tax on the lower middle class. They have the savings mostly in nominal claims. And one has to be careful about that. And one has to think about safeguards to make sure in order to preserve the trust in CBDC, which I think is very important. And with regard to monetary policy, of course, monetary policy is there to stimulate and slow down the economy. If the economy is overheating, you slow it down. If it's in a recession, you can stimulate if you have a demand shortage. And that's the key part of monetary sovereignty. It's not really the senior rich income. It's like the key part is that you can stimulate and slow down the economy. So you give the economy through the power of monetary policy of some resilience in the policy way. And the question is, how can you preserve this resilience or the power of monetary policy? This is particularly in the phase of digital dollarization. So if other currencies take over and become more attractive. So the currency competition will be much more pronounced. And the way I see it across the globe, how will this digital landscape play out? So if you compare the US, Europe, let's say China, and the emerging economies, how could one envision and conjecture how the world will look like? And the way I would say in the US, it's more likely they will move to a framework. So that's speculative, to a framework of stable coins. There will be a lot of private stable coins. They will be connected with certain supply chains. These tokens of the supply chains will be stable coins. So they will be extremely well integrated in that. And this will be a big space to play. And that's why it will make the dollar even more prominent. So the whole digitalization through well-regulated stable coins will actually make the dollar more dominant in that space. And it is less likely the US will actually be at the forefront of the CPTC development. Of course, there's also an issue how to regulate the stable coins. There's, we just saw a huge implosion of stable coins. So that's what the presidential working group was giving out the report late last year with focusing on that element. The Europe is much more focused on consumer focused. It is very much focused, you know, providing consumers some alternative. But it also might be used as a catalyst to stimulate the private sector to push ahead. European Payment Initiative and other things to make things go faster and stimulate the banking sector to make the next steps in the digitalization move. In China, it's much more the AliPay and WeChat paid two big tech companies expanding, not only domestically, but also abroad. So if you think about the dominance of the dollar, we'll expand through this stable coins denominated in dollars. If you think about Europe will be more input focused, I presume. If you think about China, there could expand a lot with these two big tech companies. And they're reaching out. So if you go in the U.S., there are many friends I have when they go to a Chinese restaurant, they pay with AliPay and WeChat Pay in Rimimbe. So the concept of a currency area is shifting. It moves to a digital currency area, which is not necessarily given by national boundaries. It's more given which space you're moving in, which virtual space you're moving in. So there are some digital currencies evolving. And China has the possibility in order to establish its currency through the big tech companies to expand globally. But of course, they're clamping down on them, which makes it harder to expand globally. But that's one, nevertheless I see these two big companies expanding and going this. And all of these developments make actually the big currencies more prominent, more powerful. And that of course, scares the heck out of smaller countries and emerging economies. And that's why they're on the forefront of introducing CBDCs in order to defend their currency from the foreign currencies taking over. And because they will lose their monetary power and monetary policy power. They would like to have also the ability to stimulate the economy when there is a session or slow down the economy when the economy is overheating. And that's essentially the challenge we are facing. But overall, it's very different across the globe. The challenge is what different countries face. But I think it's very important to maintain the monetary sovereignty, in particular the power of conducting monetary policy. And that depends very much on the design. And also depends, do you pay interest rate to allow non-residents holding this CBDC or not? How much do you want to, for the transition from, if you pay interest you might squeeze some of the market power of the banks out will this create in the transition phase some financial stability. How do you manage the transition phase? And it might interact with financial stability in this regard as well. So let me leave it at this point. Thank you, Marcus. Thanks a lot. Another key issue is the impact of CBDCs on international capital flows. And they tend to use Syria. You are working within the FSB on this topic. And my question will be what consequences could the issuance of a CBDC have on other jurisdictions, including through cross-border payments? Would the use by non-residents have an impact on other currencies? And how likely are scenarios of currency substitution in particular in emerging markets? And how can such risks, if there are risks be mitigated? So we already know that cross-border payments systems face many challenges. The high funding cost, there's long transaction change, complex compliance procedures, mismatch of operating hours and the likes. And we also know that from a client perspective, it's pretty expensive and opaque and it takes time. So my sort of weekend job for the last year and a half has been to chair one of the G20 building blocks when it comes to actually three of them. One of them is about looking into whether CBDCs could be part of a solution to improve cross-border payments and well, I have to be humble. CBDC is not any kind of silver bullet that will solve all the problems, but you can address some of them. So it's gonna be hot off the press in two weeks time. We're gonna publish a report ahead of the meeting in Bali that is kind of looking into access options and interoperability options that different CBDC systems could have. First of all, there is a sort of, we're sort of an interesting time in history because so many central banks are looking into this. So there is a bit of a sort of clean slate to kind of factoring in if we can evolve the cross-border payment system at the same time as central banks are looking into this for their own sake. So I think it's an opportunity if there is enough appetite for it to build 24-7 systems straight through processing and then we can sort of avoid a lot of the frictions that we have today. There still has to be harmonization, compliance checks and the likes, but I think looking into this or using CBDCs can sort of push this work forward also when it comes to other ways to improve the cross-border payment world. Now I said, we have been looking into different access models and we looked at how to make systems interoperable and it's always the same thing. If you want to make it really efficient, it's gonna get hard to get there. So we are looking at different sort of level of ambitions, if I may say so. So first when it comes to granting access, of course it would be a lot more efficient if even foreign PSPs, payment service providers has access to a particular central bank digital currency that would create a more open and more efficient system. On the other hand, some countries would probably find that a bit too risky and there it has to be sort of lower levels of access ambitions. There you can think about sponsored models where a PSP has a connection to a domestic PSP and then come into the central bank service offering CBDC. The other aspect when it comes to access is about what sort of possibilities should you have as an individual accessing other countries' CBDCs and should there be caps or fees, should you be allowed to hold another country's CBDC through when you're there as a tourist or should you be having full throttle to be able to hold unlimited amounts. And here I think there would also be different choices and different level of frictions that countries would like to choose. So there won't be sort of one access model to work for everybody. Also interoperability, I think we're gonna have to face the fact not all countries of the world is prepared to play nicely with all other countries of the world. So we have to think about different levels of interoperability. The best thing obviously is to build a single system but it's gonna be jolly hard for everybody who wants to be part of that to agree on governance and supervision and the likes. So we can also think about interoperability on sort of lower level, compatibility level pretty low interlinking somewhere in between. And I think if the world goes down in introducing, and in this case it's actually wholesale CBDC we're talking about, there will probably be a little bit of a patchwork kind of different models depending on national appetites. So I say I mentioned that it's a clean slate and we have the opportunity to consider cross-border functionalities from the start. And I think this could also provide benefits and serve segments on the markets that are currently being underserved. And by providing as open infrastructures as possible that could possibly help promote competition in the payment markets, not only domestically but also cross-border. And putting a bit of pressure on private solutions here I think our work is important. And the last thing I'll say about this is that tech solutions, although very key to this, they will only take us part of the way. What really will make a difference is governance. So we have to decide on standards, regulations, supervisory committees, et cetera. Otherwise this will not work. And it goes with all of the G20 building blocks when it comes to improving cross-border payments. Thank you. Thank you very much, Cecilia. Now, again, on technology. Yeah. Technology offers new opportunities, but of course it also creates new risks. And when we discuss CBDCs, we should start discussing cyber risk. So my question would be how realistic is the threat of future cyber attacks on CBDCs and how can central banks most effectively prepare to neutralize them if we can neutralize them? So a useful framing I have that perhaps is surprising to some people is that the best way to secure data is not to see or store it at all. And so I think this is an interesting approach because it goes hand in hand with privacy. The best way to make whatever central service is being run to support a CBDC resilient is to make sure it's not an attractive target. How can we reduce the amount of data that's actually being stored there? And that reduces the risk if something happens, for example. Now, that's not enough, but it goes to show that security and privacy can go hand in hand. And if we can work on privacy-preserving designs, that actually helps with security risks. In addition to that, it's important to use well-understood and hardened technology. So this means well-known cryptographic primitives that have been used widely in practice and also best practices from system design. So not necessarily the latest and greatest technology from the cryptocurrency world, though there is a lot to learn from the cryptocurrency world. And to be quite frank, we wouldn't be having this conversation about CBDC at all if it weren't for cryptocurrencies like Bitcoin. And using advances in technology, we can actually introduce designs into a CBDC which reduce risk by removing the need for users to rely on third parties who might fail or disappear or lose user funds. So we can actually give users the tools and auditors and regulators the tools they need to do cryptographic auditability, to distribute data, and to distribute control. And this is very powerful because, again, it removes that idea of the central honeypot for attackers, instead making it the data and the control more distributed. Mitigating cyber-attacks as well will need to be thought of as a public-private partnership. And we have examples from industry where we see the public sector and the private sector working together to develop standards, sometimes to self-regulate. We should think about how to regulate based on risks and roles that the intermediaries take on. And as I said before, these might be new risks and roles, so it's important to note that. And to think about how to promote transparency, competition, and openness so that users have recourse in the case that an intermediary is hacked or loses control of funds or something like that. So here, really, the technology has an important role to play in improving the potential for cybersecurity, reducing the risks associated with cybersecurity. And we have to introduce that thinking and those designs early on in the process. If my reading of the clock is correct, we are perfectly on time. So we have time for questions. I would suggest that we take three questions from the audience and one from the virtual audience. I see Wider Costanziuk already raised his hand. Wider, of course. And then others, please. Thank you. Very interesting. I have three questions. One for Ulrich. In the initial literature about CBDCs, there was a stark distinction between CBDCs as digital tokens and as deposits in the central bank. That distinction seems to have disappeared over time and it's really not clear, even in many of the texts on literature, including academic literature about CBDCs. I think there is a distinction, of course, about privacy. It's clear to everyone, but also about the technical possibility of paying interest if it takes the form of digital tokens and the central bank has no direct connection with the end users and how long they have had those digital tokens. And that's why I tend to be more against the idea of deposits in the central bank than digital token version, which, by the way, is one that is used in Sweden and China, where the thing is more developed. So what do you think about this distinction? And if indeed it would be, in a way, also quite easy to pay interest on digital tokens if it is indeed possible. Second question also briefly to Cecilia, I have followed your experience and your texts and the technical details and I have a question about if you have any prediction or even already knowledge about the degree of demand of private citizens for digital tokens that are indirectly issued by the central bank because the end users only have contact with the intermediaries and not the central bank, which keeps, of course, the main network and has this actuarial function to validate the tokens. But in countries like Sweden, advanced economies that are already well digitalized and where payment systems already are in use for decades and people are used to them, what would be the demand for digital tokens that would be, you know, as a vocation mainly targeting the substitution of notes and nothing else. Third question to Marcos about the internationalization and the cross-border payments. Yes, you mentioned that private big companies are an agent or a vehicle of that and there are indeed dozens of digital platforms that do these cross-border changes between currencies and all of that. But do you think that that by itself could lead to a real problem of currency substitution or if there would be the development of several projects with the aim of interoperability between central banks and the official side of CBDCs would not by itself augment and create the risk of currency substitution and the project that exists between China, Thailand and the Emirates. I have read text by the Thailand Central Bank very afraid of what currency substitution could result if the project is developed in certain ways. Thank you. I think I saw a hand there. Can I please ask you to identify yourself in your affiliation? I'm sorry, I don't know everybody. Hi, my name is Harold Uli from the University of Chicago. I have two questions. One is on the Goldilocks problem that you mentioned. How did we get to even talk about CBDC? I think it was the threat from Libra and then DM that made central banks wake up and say, hey, we need to introduce a CBDC. But then as they kept thinking about CBDC, the bank said, hey, wait a minute, this may lead to disintermediation. We don't want you to pay interest on it. We can't make sure that people don't hold a lot of that stuff. Can you make it sufficiently unattractive? So I think there's real challenge here, and it seems to me that we may be in the risk of designing a San Anthony dollar for those that really, really want it. But we don't want to make it attractive so that it's used on a widespread basis. So where exactly do you see the Goldilocks solution to this? It's unclear to me. I have a question to Neha, which is, I totally agree that the central bank could maintain a centralized ledger and the centralized ledger could be open to smart contracts and so forth, allowing DeFi applications and so forth. But it seems to me that there's a lot of industry, there's a lot of industry in mind to have a wholesale CBDC for that reason. But the industry is moving to the Ethereum blockchain to do all that, right? There's a whole infrastructure already developing. So how do you see this? Should there be a wrapped CBDC on the Ethereum blockchain that someone maintained by the central bank? And why can't that be solved by having a narrow bank that is regulated and does a stable coin on the Ethereum blockchain? Or do you envision a ledger that the central bank maintains as an alternative, as a public infrastructure that's opened up to writing all kinds of contracts? And don't you, I mean, are there problems that come with that? Thanks. Steve Chiquetti from Brandeis University. Thank you very much. I had a lot of questions when you started, but I have fewer now. So I think that's probably a good thing. My remaining questions are two. The very short and simple one is I've always thought one of the problems with financial access was identity verification. And how is it that we solve the identity verification problem? It doesn't seem that CBDC has a whole lot to do with that. The other reason, of course, people don't have bank accounts is they don't have any money, and that's not solved either, I don't think. So the question is whether or not that's really a problem. The second one is to think about the disintermediation and currency substitution problems as being problems in stress circumstances. So these are problems that we think about in what I think of as certain kinds of states of the world. Now, one of the reasons that I believe we have central banks is to ensure elastic supplies of currency under stress. And the only way to ensure that bank deposits and central bank money trade at par is for there to be an elastic supply. And we don't want there to be, I don't think, states of the world in which central bank money and bank deposits do not trade at par. And so the question is how do you ensure that those exist without offering unlimited supplies of central bank money under all states of the world? Thank you, Steve. I would now turn to our virtual audience, and I would give the floor to Professor Vives from ESF Business School. Sarim, you have the floor. Thank you. Hi, Fabio. Hi. So I have two main questions. The first one, it's a little bit provocative. I've heard and read many policy papers on the issue, and I've seen many objectives to introduce from the public point of view, to introduce a CPC, adapting to the digital era, improving efficiency of payments, including cross-border payments, preserving privacy, fostering financial inclusion. My impression is that when I see so many objectives, I see too many reasons. So maybe there is no good reason. So the question is what is the main market failure that CVDC is addressing? So I would like to question the panel, what's at the forefront? Because otherwise, it will be a solution in search of a problem as the report on this Committee of the Chamber of Lords will be a positive, right? And in this sense, and a little bit in Harrell's question, to me, now CVDC looks more like a defensive move by central banks, feeding the entry of platforms in digital money, like what's the case of Libra and Facebook, or offering digital currencies. But probably this is not a good enough reason to have a defensive reason. A recent report by my school and CPR, in fact, in which Fabio provided the speech and comments also from Nija and Ulrich, so I just missed two panelists here, concludes basically that a main problem is competition in payment systems. But it's not clear that competition in payment systems, the best way is to introduce a CVDC, if this is the problem, that's one. And the other, and this is more of a question, I guess, for the panel, is a question of its key. In our report, I think we concluded that CVDC, and in particular the retail variety, should not be rushed, in particular in developed economies, until both when the technology and economics are compelling. And I would like to question the panel on that. Thank you very much. Thank you, Serien. So if you agree, I would give the floor to each of the four panelists. No, yeah, four. Ulrich is still online. For two minutes, so that we would be within the time limits, should I start with you, Cecilia? Okay, thank you very much. So Francesc, apologies for mispronunciation, and the gentleman there was kind of alluding to what is actually the real problem here, and there are no other solutions to the imagined or real problem. My sales pitch for this is that this is an investment to protect the integrity of the monetary system, the fiat money system for all time. I see it as an evolution of the central bank role rather than a revolution. I think cash will disappear as a payment method, that's for sure. You were perhaps simplifying a bit when you said that we're talking CBDC because we've got Libra. This discussion started much earlier because the really driving force here is digitalization, and if you look at the various arguments and reasoning by central banks that are looking into it, they all rhyme. They're all kind of the same forces that society changes, and we have to change with it. When the Riksbank was formed, we did copper coins weighing 20 kilos each. If we hadn't changed then, we would have been out of business a long time ago, and someone else would have provided the service that society needs. Vitor, you mentioned China and Sweden. China is already out. We are still at an experimental phase, so I'd just like to point that out. We have done some estimates on demand. Jolly difficult, it depends on what you assume, obviously. I don't have the exact numbers on the top of my mind, but we have estimated, to some assumptions, exercise 7 to 10 percent of GDP, and if you add that on top of the current 1 percent of GDP, which is the cash, and you think about that as this kind of future M0, I mean that's lower than most countries. But we can discuss the assumptions. Stephen Chiketti, I agree fully, digital ID is critical. It also needs to be maintained cross-border, and I'm also happy to hear that we agree that it importance of protecting parity one to one, and I think this could be done also through reserves, which is also in the Riksbank, sorry, the central bank toolbox. And I'll stop there. Neha, you want to blow? So, to address the subset of those questions. So first I want to address the question around tokens and accounts, this language. So I, for one, am a bit happy we've lost those terms, and let me explain why. I think the problem is that they were over-bundled, and that in addition they meant different things to different people. So to economists, it's very clear, token and account is a digital bearer instrument that has something where identity is intermediated by a third party to access your funds. But to computer scientists, it's about the data model, UTXO versus account balance. But there's one more point, which is that in the digital realm, you cannot have a digital bearer asset that can be self-validating. So in the physical realm, we have bearer assets. We can pass them peer-to-peer. We don't have to involve a third party. In the digital realm, you cannot do that with digital objects because they can be so easily copied. And so I think this has led to a lot of confusion, a lot of over-bundling of different ideas that go with the token versus account terminology. And so people have stepped back from using that and speaking more about specifics, privacy. Should it be peer-to-peer? How exactly is access gated? How is it authorized, et cetera? So I'll speak to that. To Harold's comments on how much exactly infrastructure and how many services would a central bank provide, would they provide a fully-featured smart contracting language? I don't know the answer to that. And I think it's going to be quite different for different central banks. They're each going to take a look at the risks and rewards, and they're going to make their own decisions. I hope that central banks will offer at least some modicum of programmability if they were to choose to launch CBDCs. And so far, they seem interested in that simply because it's where a lot of the promise lies. I think that quite a bit of functionality can be built at other layers. It doesn't necessarily have to look exactly the way that cryptocurrencies look. Where a fully-featured smart contracting programming language is embedded in whatever the central bank runs. Now, as to your question as to why do that instead of just launching stable coins on top of Ethereum that are backed by a central bank, I think the key question here is governance. Just because the central bank is launching a stable coin on Ethereum doesn't mean that they would be able to govern the system. In fact, the governance of the system would still be determined by the validators, the anonymous distributed global validators of the Ethereum blockchain who would determine exactly how contracts are executed and which transactions are recorded or not recorded. They would determine the transaction fees, for example. So, I mean, if a central bank wants to give up that level of control of governance to an anonymous set of validators, then by all means make that choice. But I'm not sure that that's necessarily the wisest route. Thank you. Markus? Thanks a lot for all these questions. Let me totally agree with Nia about the account based. I think this was a confusing categorization. But if you want to go to digital currency, it's very hard. Concerning the currency substitution, I think there's more currency substitutions or competition occurrences will be more severe. Also, when you think about if there are several tokens and the tokens are denominated in particular currency, who is deciding that you switch this whole supply chain token to another currency? So, while in the older days right now, you have to coordinate from going from one currency to another currency, so a lot of citizens have to coordinate, there will be a lot of central organizations deciding, okay, we switch now the currency, then you have way more hard switches going on. So, currency substitution will change a lot. The competition among currencies will change. Concerning Harold's questions about adhering to interoperability, I would like to add one more aspect to it is there's a political economy aspect to it. Of course, you have a tendency now of the private sector to start stable coins and essentially get a lot of senior Germany, get very wealthy, and then later on, get essentially validated by the official sector and get essentially this declared as public money. And this way, certain people can get enormously rich this way. So, that's one way to go, but it's probably not the optimal, it's not in the public interest to go this around. Concerning in stress times, I think Steve asked this, you know, in stress times, you have to have the uniformity guaranteed and bail out. What happens if there's a bank run in particular? I think you can always, it will change the nature of the central bank, but what do you have in mind? So, when you do a bank run now, you withdraw cash. In the current world, you can always do a silent bank run by withdrawing money from one bank and run to another bank, which seems to be very sound. So, the bank run probability is already there and you will have the same as another safe haven, the CBDC. We can run on the CBDC, but the central bank will see it right away and can just channel the funds back. So, if the bank is sound and solvent, you can channel just the funds back. So, there's way quicker information flow and it's much quicker to react to that. If there's a run on the whole banking system and the money flows out of the country, so that's what's going on, can go on right now as well, without capital controls, instead of the money flowing out of the country, it's actually flowing to the CBDC. Again, it's a better situation for the central bank to channel the funds back and stabilize the system because it's not leaving the country. It stays in the country or in the currency area. With regard to what is the purpose of CBDC, I mean, there are many reasons what the purpose of the CBDC are, of course, conceptually as a question, or let me start this way. At the moment, the anchor is the euro and ultimately the anchor is that you can convert your deposits into some cash and some euro cash and when cash becomes less useful, this anchor is going away. Do we need and have to replace this cash anchor with a modern anchor like a modern CBDC or can we do it without an anchor? And there's an argument to make. You can actually also do it without an anchor by just having a bank regulation, lender of last resort functions, and some deposit insurance. You have all these three instruments together could also create an anchor and preserve the anchor as a denomination, everything in euros. But that's an experiment. We have never had a system where we don't have this cash anchor where you can go to official currency and CBDC would be naturally equivalent to this cash anchor, but we can make a bigger leap forward and get rid of any anchor, but we don't know. That's a big experiment and the question is, do we want to have this experiment or not? Or is it more natural the transition to have a CBDC as an anchor replacing cash what we had before? So I believe that. Thank you, Markus. Thank you very much. Yeah, too many. Thanks to Nia for having answered the question of Vitor on tokens. Indeed I could list at least four different meanings of tokens as they have been used and that's why we also got rid of this terminology. In any case, I think central banks tended to conclude that holdings of CBDC need to be associated with a name to an identity to a holder and that's the necessity then also for remuneration and limitations. And on limits, I think Steve, you asked why, I mean, how can you always preserve parity between commercial bank money and central bank money if you have limits? I think that's, I mean, you cannot have, of course, an aggregate limit and say, I would only issue one trillion euro in CBDC, but you can have individual limits again for holders and then there's just no secondary market. If I asked someone on the street, give me CBDC, if I, at the end, I will have a claim towards that person's account on CBDC, it's not CBDC any longer because it's an IOU issued by this person and therefore it has not the value of CBDC and therefore there's just no secondary market if you limit the supply of CBDC via individual holdings of CBDC and therefore it's not an issue. And then again on why CBDC at all, I would be even maybe more radical than Marcus in answering this question. So, you know, bank notes is just one form of central bank liability. It was not the first form of central bank liability and there's no reason why it should be the one and only and everlasting, it's technology you could say from the 17th century, there's no reason why the central bank should not follow evolution of society as CCIA has called it and also move into the digital age and this is, you could say, a conservative move, it's not a revolutionary move because it preserves a two-layer monetary system which has served us well and I mean, Marcus, you were saying maybe there is a way where we don't need effective convertibility into central bank money but commercial bank money is nothing as you could say then a promise of conversion into central bank money. No, that's what commercial bank money is. So, if this definition of commercial bank money is a fictitious one then I don't know what commercial bank money will be in practice. So, for me, it is just, you know, moving with time, accepting digitalization of society, rejecting the claim that central banks are natural issuers of bank notes only as monetary liability. Thank you, Ulrich. I think we can bring this panel to a conclusion and first of all I want to thank all for this fascinating discussion which I believe has shown that the debate on CBDC is moving from the theoretical rationale for introducing a central bank digital currency to implementation aspects. I will not try to draw any conclusion even though I wrote my conclusion, I will only make one comment on this question of whether CBDC is a solution in search of a problem. I really don't think so. I think that we should start this discussion by considering that cash is becoming less and less popular and we cannot rule out the possibility that in the future people will not be willing to use cash or they will not be able to use cash because the world will be digitalized. In that case it appears because there is no more demand for cash. We would have an economy without a safe asset. And we know from the experience from economic history, for example from the experience of the free banking periods in the US, in the UK, in Switzerland, in Italy, that when there is no safe asset, the financial sector is vulnerable to crisis. In a way the instability that we have observed in the market for cryptos might be traced back to the fact that they were not convertible into a safe asset. You can easily use them to convert into riskless central bank money. And this means that users, holders of cryptos have very little information on the value. So those investments are prone to runs. So we want to avoid to be trapped in a situation in which we realize that the absence of safe assets triggers instability. Also because in order to introduce a CBDC, it takes several years. We are not issuing a CBDC. We are getting ready if something happens. We are ready to intervene. And may well be the case that somebody in some other continent will use and introduce a CBDC which could be used for international transactions. Maybe that we could have a currency substitution also in large economic jurisdictions. You should not forget that of course this is not an imminent risk. But we should not forget that until the first world war, the pound was the dominant currency in the world. In ten years the dollar took over and became the dominant currency and the pound is one of many reserve currencies now. We don't want to run the risk. This is not a risk that a large jurisdiction like the Euro area, a large jurisdiction like others that you know very well should take. I really avoid this. But sorry, I should not enter into this. I'm the moderator. So let me once again thank the panelists and the audience for very insightful comments and questions. And thank you very much. Thank you. So thank you Fabio for doing such an excellent job of chairing what is our final panel of today. I think ahead of lunch we've heard an awful lot of stimulating ideas about how central banks can stop FinTech eating their lunch. We heard about the importance of putting the use case and principles ahead of tech. And among those principles that I took away from the session were that CBDCs must be trustworthy, inclusive, private and competitive. So please join us tomorrow here in the room or online at 8.45 am. We'll also be finding out the winner of our Young Economist prize as well as having several more sessions and panels. For those of you here enjoy your afternoon in Cintra. For those of you online enjoy your day wherever you may be. Goodbye.