Led by Guillaume Lepecq, Chair of CashEssentials, the two-day event was bookended by two other important initiatives. First, a three-part Futures Literacy Lab, in association with the UNESCO Chair for the Future of Finance, aimed to imagine cash’s role in the Future Monetary Landscape. Second, and to conclude, a half-day research seminar sought to understand the Cost of Payments better.

Setting the Scene

Day One of the conference welcomed three senior central bank representatives – Helena Tejero from the Banco de España, Paloma Varela from the European Central Bank and Kathleen Young from the US Federal Reserve. All three are relatively new to their current senior posts (Kathleen was appointed Chief of FedCash Services for Federal Reserve Financial Services just a few days earlier!). Still, all brought a wealth of industry experience and information from their respective organisations, providing delegates rich insights into the continually evolving cashMoney in physical form such as banknotes and coins. More environment.

Each central bank speaker remarked on the significant growth of currencyThe money used in a particular country at a particular time, like dollar, yen, euro, etc., consisting of banknotes and coins, that does not require endorsement as a medium of exchange. More in circulation since the start of the Covid-19 pandemic but also highlighted in Europe a further spike in demand at the onset of the Russian invasion of Ukraine, reinforcing how in times of adversity and uncertainty, people still turn to cash.

More recent returns of excess cash to central bank branches were also noted as inflation and interest rate rises start to bite, a trend with an increased focus on the cost of holding cash stocks to watch in the coming months.

The trends relating to the two major US dollarMonetary unit of the United States of America, and a number of other countries e.g. Australia, Canada and New Zealand. More and euroThe name of the European single currency adopted by the European Council at the meeting held in Madrid on 15-16 December 1995. See ECU. More currencies were not alone, as Antti Heinonen, member of the CashEssentials Steering Committee and former Director of Banknotes at the ECB, showed through the data he regularly compiles from more than 100 central banks and issuing authorities. Growth in banknoteA banknote (or ‘bill’ as it is often referred to in the US) is a type of negotiable promissory note, issued by a bank or other licensed authority, payable to the bearer on demand. More demand throughout the height of the COVID-19 pandemic averaged more than twice the long-term trend rate, and while trends in 2021 reverted closer to the norm in most countries, currency issue remains robust.

The disparity between increased currency issued and declines in actual transactional currency use was a repeated theme of the conference, as was the increasing focus being taken by central banks to understand better the dynamics of the commercial cash infrastructures in their countries.

Banco de España and the Federal Reserve shared their research on changes to cash access as commercial bank branches and ATMs continued to close. Alex Bau, VP of Data and Policy Analysis at the Federal Reserve, drilled down on this data in the CashEssentials’ research seminar, describing the analysis and simulation work done to estimate the consumer impact and cost of further reductions in cash access.

More Cash but Fewer Cash Payments

Further central bank insights on Day Two reinforced many of the critical themes that already surfaced, with a specific focus on cash trends in Germany being presented by Heike Wörlen from the Deutsche Bundesbank, Gianluca Maddaloni from Banca d’Italia sharing his cash supply-chain management analysis in operatic fashion and Ian Woolford from Te Pūtea Matua, the Reserve BankSee Central bank. More of New Zealand (RBNZ), providing an update on the work being undertaken as part of the Bank’s Future of MoneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More – Te Moni Anamata – programme.

• Wörlen shared findings from the Bundesbank’s sixth 2021 study on paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More behaviour in Germany, reporting declines in cash, the payment methodSee Payment instrument. More accounting for 58% of respondents’ purchases of goods and services, compared to 74% back in 2017. Online shopping and growth in debit card (primarily domestic Girocard) use are all playing their part in eroding Germany’s historical preference for cash use.
• Woolford noted findings from the RBNZ research, which included widespread public support for cash, even if the individuals weren’t hefty cash users in their own right.

Other central bank presentations came from

• Wim Goyens, who provided insights into constructing the National Bank of Belgium’s new cash centreProcessing centre for large volumes of cash, often in facilities that have special security and logistic characteristics. Cash centres can be operated by a central bank or a commercial entity (usually bank or a cash-in-transit company). More, consolidating their cash operations in a purpose-built facility on the outskirts of Brussels.
• Carlos Gonzalez shared Banco de España’s work on addressing the environmental sustainability of cash in Spain.

Making A Case for Cash

Issues discussed here –  including access to cash, acceptance of cash and cash and crises – were three of six themes debated later in a series of speed-dating-style round table discussions.

• Building on the growing focus on the environmental impact of cash use, Leeann Shanks – Sustainability Lead Cash & Self Service Operations at NatWest Group – described the work at her bank (both an issuer of banknotes in Scotland and a significant participant in the British wholesale and retail cash supply chain) and the broader United Kingdom Cash Industry Environmental Charter Group which is working towards a greener cash cycleRepresents the various stages of the lifecycle of cash, from issuance by the central bank, circulation in the economy, to destruction by the central bank. More. Key takeaways were the need for better data points to measure tangible targets and how practical steps such as reducing plastic banknote packaging have real environmental and significant cost-saving benefits.
• In his presentation, Diederik Bruggink of the European Savings and Retail Banking Group reported findings from the European Retail Payments Board Report on Access to and Acceptance of Cash.
• At the same time, Graham Mott from the LINK ATM Scheme provided insights into changing ATM demand in the United Kingdom in a presentation entitled ‘Emerging from the Pandemic, but into the Cost of Living Crises’.

The three other speakers, Javier Rupérez from the Spanish cash campaign Plataforma Denaria, Brett Scott, author of Cloudmoney and Zennan Green at Glory Global Solutions, made forceful presentations to defend cash.

• Plataforma Denaria, which was set up last year and is funded by the Spanish cash-in-transit sector, has already succeeded in giving Spaniards the right to pay in cash, which was enshrined into law this summer. Demonstrating the success of advocacy at a local level perhaps provides a blueprint for advocacy groups in other countries and their efforts to maintain cash as a public good.
• Brett Scott, an author best described as a monetary anthropologist, gave a fascinating view on what drives consumer payment behaviour and how BigTech exploits this. Humans, he said, are essentially mimetic – i.e. they subconsciously follow one another – and payment companies, by driving out choice, are nudging the public into following the path to cashless.
• On a more practical note, Zennan Green demonstrated that solutions are there to facilitate access to and availability of cash given the rapid closure in many countries of bank branches and ATMs. Glory – traditionally a supplier of automation technology for those bank branches – provides many new generations of solutions, having recently embarked on a round of investment into companies harnessing digital technology to ensure physical access.

Cash, Innovation and CashTechThe expression was first coined by CashEssentials and is the encounter of cash and technology. It brings together innovative companies who leverage software and modern communications technology to improve cash services: access to cash; acceptance of cash; and the efficiency of the cash cycle for all stakeholders. More

• Marcel Ficken from ATMIA provided an update on the progress of the association’s Next Gen ATM project that aims to future-proof the most crucial cash access channel.
• Barry Röhrs offered a fascinating round-up of innovations across the cash cycle in Africa, highlighting how many non-traditional players are enabling access to cash and payments to the previously unbanked, harnessing new technologies at breathtaking speed.

Ahead of the inaugural CashTech Innovation Awards, three CashTech entrepreneurs, Sandipan Chakraborty of Sonect, Sergio Kvaternik of viafintech and Julian Schubert from Koenig & Bauer, debated the topic ‘Can CashTech Solve the Cash Conundrum?’ While the CashTech industry is still nascent, the innovations to provide alternative cash access, acceptance and, in the case of Koenig & Bauer’s ValiCash™, an effortless way of authenticating banknotes via a smartphone app, all offer significant contributions to support the future of cash.

The Role of Cash in the Future Monetary Landscape

As mentioned, ahead of the Madrid gathering, several participants took part in a Futures Literacy Lab to imagine the role of cash in the future monetary landscape. To the broader conference delegates, Lab moderators Martin Calnan, UNESCO Chair for Futures Literacy and Riel Miller, Senior Fellow at Ecole des Ponts Business School, provided insights into the Lab learnings, together with Antti Heinonen, Guillaume Lepecq and Richard Wall (Chairman of the International Association of Currency Affairs) – who were three of several group facilitators.

What was evident from the Lab feedback and conference is that though cash is one of many competing payment methods, it is much more! While cash is a unit of account, a store of wealth and demonstrably turned to for contingency purposes, cash has many other intrinsic and intangible characteristics, many deeply rooted in culture and tradition.

No one should take these unique properties and attributes for granted or leave them to market forces and aggressive payments industry competition. Cash access, acceptance and use may all diminish; being payments-system agnostic is not good enough!

Two comments emerged from the Lab sessions – ‘if we start thinking about the future of cash, we’ll spend less time discussing its short-term demise’ and ‘Money is like an army. If you don’t have your own, you will have someone else’s!

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