Stressing the German central bank's concern about electronic money, he said banks were the safest guardians of electronic cash systems since they had to meet legally-imposed liquidity restrictions and had long experience of cashless payments.
Zeitler said in a statement that electronic money innovations were fundamentally positive as a way to speed up transfers. But "it is also important that the security of payment transfers and currency stability do not get left behind," he added.
Electronic purses are plastic cards with an in-built micro-chip which stores the electronic cash value of users' accounts and can be reloaded at special machines.
The proposal to restrict such projects to banks is part of a new German banking law which is still under preparation but which is expected to be enforced in 1997.
Zeitler said issuers of electronic cash had to be extremely reliable because a sudden collapse of an electronic cash system, due to forgery or technical failure, could have "significant negative" consequences for the economy.
While electronic purses, also known as smart cards, are not yet available in cash-dominated Germany, tests are being run on several projects.
Current projects being tested in the Munich region include a card to pay for telephone calls and local train tickets and another with broader application, which can be used for small purchases up to 50 marks.
