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BIS SPEECHEScentral bank

Burkhard Balz: Central bank policy in an evolving cash landscape

13 May 2026, 13:20 UTCRead full speech on bis.org
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Hawkish Score+5Neutral
Trailing 2 speeches
Speaker DriftBurkhard Balz · 2 speeches in 12motrend: shifting dovish
−100neutral band ±25+100

At a Glance

The desk interprets Burkhard Balz's recent remarks on central bank policy as a pivotal moment in the ongoing evolution of cash and digital currencies. Per the full note source, Balz emphasized the need for central banks to adapt their monetary frameworks to accommodate the changing landscape, particularly as digital currencies gain traction. This aligns with our view that the Deutsche Bundesbank's proactive stance could influence the euro's strength against the dollar in the coming months. The desk anticipates that shifts in policy could lead to increased volatility in EUR/USD as traders adjust their positions accordingly.

Key Takeaways

  • 01Balz reaffirms Bundesbank's commitment to cash as a public good.
  • 02Central banks must balance digital innovation with cash accessibility.
  • 03EUR/USD outlook depends partly on digital currency adoption pace.

Full Analysis

What the desk is arguing

Burkhard Balz stresses that central banks must adapt their policies to a changing cash landscape without undermining the public's trust in physical currency. He argues that cash remains essential for financial inclusion and privacy, even as digital payments grow.

The speech implicitly rejects the notion that cash is becoming obsolete, highlighting the Bundesbank's efforts to maintain cash infrastructure and explore digital euro options as complementary rather than replacement tools.

Where it sits in our coverage

Our coverage aligns with Balz's view that cash will persist as a key pillar of the monetary system, though we see the transition to digital currency as more accelerated than his tone suggests. Our consensus target for EUR/USD remains 1.07, with a firm spread of 1.04–1.12 through 2026.

Firms like Commerzbank expect EUR/USD at 1.12 (Dec 2026) while Deutsche Bank forecasts 1.04 (Mar 2026). This divergence reflects differing views on the speed of digital adoption and its impact on FX flows.

How other firms see it

Goldman Sachs is aligned with Balz's balanced view, forecasting EUR/USD at 1.10 (Dec 2026) as they expect gradual digital transition. Morgan Stanley is contrary, expecting more rapid digital disruption to weaken EUR/USD to 1.02 (Dec 2026).

Market Implications

The speech supports a neutral-to-slightly-positive view on EUR/USD as it reinforces institutional support for cash, potentially reducing downside risks from digital disintermediation.

What changed vs prior statement

  • 01No material change in policy stance vs prior statement.
  • 02Language essentially preserved across key themes of economic stability and monetary policy.
  • 03Vote split: No vote-record change.

From the original

Keynote speech by Mr Burkhard Balz, Member of the Executive Board of the Deutsche Bundesbank, at the Banknote Conference, Washinton DC, 13 May 2026.

Read full original at bis.org →

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