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A Novel Approach to Re-imagining the Future of Cash

Categories : Future of Cash
February 23, 2021
Tags : Financial inclusion, Future of Cash, Innovation, Sustainability
A new CashEssentials White paper challenges the notion of a singular digital future for money. It frames the discussion around the future of cash not only as a technological issue, but as a societal question with fundamental implications for inclusion, equality, resilience, efficiency and privacy.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

The paper, The Future of Cash? A novel Approach to Re-imagining the Future, authored by Guillaume Lepecq and Petteri Lillberg is based on the discussions which took place during a series of webinars hosted by CashEssentials in May and June 2020, gathering futurists and experts from the cash and payments world aimed at using Futures Literacy to imagine the Future of Cash.

The pandemic has forced central banks, governments, commercial banks and other stakeholders to adopt short-term emergency measures to ensure the smooth supply and circulation of cash. This has involved remarkable creativity and innovation to overcome the immediate threats and challenges. Some of these decisions may become long-term fixtures. Others will be dropped at the earliest opportunity.

Re-Imagining the Future

But the crisis has also encouraged us to think about the long-term implications and the world after. The crisis will pass. But the world after will be different. We now need to imagine cash in the world after.

In fact, Covid-19 has marked a notable return of more diverse futures thinking. It has highlighted the need to retain agency via identifying multiple plausible futures, recognizing different pathways and, importantly, imagining desirable societal futures, even amongst acute crises.

The approach taken in this paper is the systematic exploration of futures that does not see the future as deterministic, certain and passive, but as stochastic, visionary and proactive. Futures thinking enables the showcasing of the multitude of potential futures and ask which of these are possible, probable and desirable, and importantly, how to make better decisions in the present moment to strive for a desirable future, rather than just react.

The paper identifies five critical tensions that will shape the future of cash:

  1. Economic recovery: How the post-COVID recovery led by active, national regimes changes the role and expectations for regional and global institutions;
  2. Society: How the culture of surveillance powered by ever-present data gathering clashes with the individual’s right to anonymity and privacy;
  3. Sustainability and Inclusion: How our current ideas on economic growth and need to provide well-being include the necessary planetary boundaries for human activity;
  4. Technology: How digital platforms & data as public policy tools clash with platforms & data as commercial, privately-owned domains;
  5. Money: How centrally issued & diversified means of payment co-exist with privately issued & fragmented means of payment.

A Desirable Future for Cash

Based on these tensions, the paper analyses different scenarios which create a credible narrative of possible and plausible development paths, events and actions leading to a specific future. It then focuses on a desirable future and stresses that the future monetary system should:

The report concludes that even if a future without cash is possible, it is not probable as it would create a number of negative outcomes, including in terms of efficiency, inclusion, fairness, resilience, and the protection of privacy. The future of cash is not merely a competition between cash & digital, nor limited to payments only. The discussion should not be focused on technology (form) but rather on the social and economic role (function) of money. Cash should co-exist alongside alternative forms of money because it provides a much-needed diversification and a safeguard against some of the threats and challenges posed by digitalization.

To ensure a future-proof and sustainable cash ecosystem, progress is required in four key areas: the infrastructure to ensure the smooth and efficient circulation of cash throughout the economy; the cash distribution models to strike a balance between market-driven and public forces; communication to educate the public on the social and economic role of cash; research to improve our understanding of how cash is used and foster further innovation.


This post is also available in: Spanish