CashEssentials: Honing the Debate on the Future of Money

The article was first published in the July 2022 issue of Currency News. It is republished here with the permission of the Editor.

Compared with the resources of the cashless lobby in advocating for a digital payments future, those of the lobby supporting cashMoney in physical form such as banknotes and coins. More are minuscule. That isn’t to say that there aren’t organisations supporting the case for cash – there are several – but their activities are primarily centred around specific regions or sectors and promoting these interests.

One organisation  – indeed the only organisation – that not only spans the entire 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 but approaches the whole topic of the future of cash from an inter-disciplinary and academic approach is CashEssentials. This think tank seeks to influence debate and policy regarding 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 and payments from a societal perspective.

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 News spoke to founder and chair Guillaume Lepecq, who is also chair of the upcoming and appropriately named Future of Cash conference, to find out more about CashEssentials, and where it seeks to add value and influence changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More in the approaches to cash as a social necessity.

Q:       First of all, what is CashEssentials?

A:       CashEssentials is a dynamic think tank challenging the notion of a singular future for money (digital or otherwise). To wit, we frame the discussion about the future of cash not only in technological terms but as an all-pervasive societal issue with fundamental implications for inclusion and equality, resilience and efficiency.

To challenge the dominant narrative – to diversify and sophisticate the outlook – we believe in the imperative of an open and transparent ‘Cash Dialogue’ that embraces all sectors of society. The future of money and the monetary system must be fair, resilient, sustainable, inclusive and respectful of individual privacy. It must include a vision for human betterment – no less. To us, a part of that solution is cash.

CashEssentials was formally established in 2018 as a not-for-profit organization. However, the story started in 2016 with the publication of a white paperSee Banknote paper. More, ‘Cash Essentials – Beyond Payments’. The report emphasized that cash possesses unique attributes unmatched by digital forms of money. That cash generates societal benefits which are not directly linked to its paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More function.

Following the white paper, we first created a website www.cashessentials.org to offer reporting and a critical appraisal of the significant developments across cash, money and payments as they happen.

The story’s final stage consisted of creating a think tank with an independent steering committee, gathering representatives from central banks, academia and the payments world to hone the debate on the future of money.

Q:       What are your objectives?

A:        Some are calling it the ‘War on Cash’. Others are framing money as the ‘New Space Race. Central banks and financial institutions – the traditional money issuers – are being increasingly challenged today by a flotilla of disruptive newcomers from FinTechs and Bigtech to telcos and crypto-assets.

In our view, the form of money is not just a technology issue. It is fundamentally a socio-economic issue.

Our core mission is to monitor ongoing developments and undertake research and analysis on cash and its future while providing a platform for balanced inquiry and debate about cash, payments and monetary systems for the benefit, viability and well-being.

Q:       What are the main activities?

A:        Our activities are articulated around three key pillars.

The first is information: we monitor vital trends and developments in cash, money and payments and contribute to the debate, not only within the cash community but also with the broader community of payments experts, policymakers and regulators, consumer organisations, as well as the humanitarian community. We believe there is an essential need to raise awareness and enhance cash literacy.

The second is research. We produce reports with a view to outcomes: encouraging a regulatory change, bringing influence to bear on the political class; sensitizing businesses to innovation across the cash and payments industry; arguing the ‘case for cash’ creatively in the public policy space. We are domain-specific specialists, but we encourage an open forum approach because cash is the province of the citizenry.

The third pillar is innovation and communication. For instance, we have established the 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 Forum as a promotional platform enabling innovators across the sector to showcase leading-edge technologies and their original thinking on such industry perennials as bottlenecks in the cash cycle and the costs associated with cash.

Via the Forum, we encourage discussion and exchangeThe Eurosystem comprises the European Central Bank and the national central banks of those countries that have adopted the euro. More around best practices, identify sectoral obstacles and opportunities, and enable cooperation between start-ups, banks, regulators, charities and other non-state interest groups. The Forum is emblematic of CashEssentials’ broadly collegiate approach.

Q:       Who are the stakeholders?

 A:        Our members come from different parts of the cash ecosystem: 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 production, coinA coin is a small, flat, round piece of metal alloy (or combination of metals) used primarily as legal tender. Issued by government, they are standardised in weight and composition and are produced at ‘mints’. More minting, and cash managementManagement and control of cash in circulation. More. Several associations are affiliated with CashEssentials or are represented on our steering committee, such as ATMIA, IACA, BnEI, CPCC, ESTA…

Q:       What are you currently working on?

A:        We are currently preparing a Futures Literacy Laboratory on the role of cash in the Future Monetary Landscape in association with the UNESCO Chair for the Future of Finance.

Futures Literacy Labs are an advanced, field-tested methodology for exploring the future and gaining new insights into the nature and impact of imagined futures.

In this Lab, participants will deploy their collective intelligence to present and assess probable and desirable futures of cash. Using action-research/action-learning tools, the Lab will offer the opportunity to analyse the burning questions facing the future of cash. For instance, the fundamental ethical issues related to the future of cash range from loss of privacy to concentration of knowledge and data.

The Lab will take participants beyond deterministic extrapolations and techno-fatalism to examine changes inspired by open and creative futures.

Think of COVID-19. The pandemic showed that futures we take for granted can be called into question in a matter of days while at the same time sparking a powerful need to invent new images of tomorrow. Such events underscore the importance of being able to exercise and diversify why and how the future is imagined.

The Lab will be moderated by Riel Miller, Senior Fellow at Ecole des Ponts Business School and one of the world’s leading strategic foresight designers. Futurists will facilitate sessions – Martin Calnan, UNESCO Chair for Futures Literacy; Petteri Lillberg, Senior Consultant at Demos Helsinki, and experts from the cash community – Katrina Brendle, Deutsche Bundesbank; Päivi Heikkinen, Bank of Finland; Antti Heinonen, former Director of Banknotes at the ECB; Kathleen Young, Federal Reserve BankSee Central bank. More of San Francisco; Richard Wall, former Head of Currency at the Bank of Canada.

The Lab is open to all and is built around three three-hour sessions. The first two will be held remotely on 7 & 8 September, and the final one will be held in person on the 14 of September at the Future of Cash Conference in Madrid.

Q:       To conclude, are you optimistic about the future of Cash?

A:        We see some positive signals.

The exceptional growth of cash in circulationThe value (or number of units) of the banknotes and coins in circulation within an economy. Cash in circulation is included in the M1 monetary aggregate and comprises only the banknotes and coins in circulation outside the Monetary Financial Institutions (MFI), as stated in the consolidated balance sheet of the MFIs, which means that the cash issued and held by the MFIs has been subtracted (“cash reserves”). Cash in circulation does not include the balance of the central bank’s own banknot... More worldwide during the COVID-19 pandemic demonstrates the global trust in cash. This trust makes cash the store of valueOne of the functions of money or more generally of any asset that can be saved and exchanged at a later time without loss of its purchasing power. See also Precautionary Holdings. More safety net.

The emergence of CashTech – including start-ups and new entrants – indicates that providing cash services can be a profitable business. We are also seeing several central banks and regulators address the issue of access to and acceptance of cash. Australia, the 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 area, the Netherlands, New Zealand, Spain, Sweden, the UK, the US and others are all looking at preserving the cash infrastructure.

We should welcome these policy changes. But this is far from enough.

They are focusing exclusively on the supply side. I think there is a massive need to act on the demand side. Payment service providers and governments have very effectively nudged consumers away from cash. We need to nudge them back. There is a huge need for a cash literacy programme to educate people on cash’s social and economic importance.

Cash is, after all, an enabler of social connections, perhaps what we need most after years of lockdown and digital interactions.

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