This paperSee Banknote paper. More is based on a Futures Literacy Lab hosted by CashEssentials and the UNESCO Chair for the Future of Finance at Ecole des Ponts Business School in September 2022. Our collective poverty of imagination has limited our capacity to anticipate the 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. This has strengthened the narrative of a linear forward projection of today’s circumstances and changes, which is assumed to lead to a singular digital future for money.

Futures literacy is a capability. Being futures literate means distinguishing the different reasons and methods for imagining the future. Like most capabilities, there are many ways to gain a deeper understanding – to learn to become futures literate. The Lab’s goal was to co-create and re-imagine new futures to address key stakeholders’ roles and responsibilities in shaping a sustainable future monetary landscape.

The Lab was moderated by Riel Miller, Senior Fellow at Ecole des Ponts Business School and one of the world’s leading designers of processes for using the future. Sessions were facilitated by futurists – Martin Calnan, UNESCO Chair for Futures Literacy; Petteri Lillberg, Demos Helsinki – and experts from the cashMoney in physical form such as banknotes and coins. More community – Alexander Bau, Federal Reserve BankSee Central bank. More of San Francisco; Katrina Brendle, Deutsche Bundesbank; Päivi Heikkinen, Bank of Finland; Antti Heinonen, former director of Banknotes at the ECB; Guillaume Lepecq, Head of CashEssentials and Richard Wall, former Head 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 at the Bank of Canada.

Here are some of the takeaways.

Cash is a Means of PaymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More, a Store of Value… and More

We often focus on the tangibility of cash, which is an obvious and specific cash attribute. This tangibility underlies some of the core attributes of cash – universality, efficiency, and resilience.

But there are multiple dimensions of cash, including intangible features. Cash is not just a tool or an aggregate of technical characteristics. It also has social, historical, and cultural dimensions. Exploring the “why” of cash, as opposed to its “how” or “what,” opened the discussion for cash to a more prominent role in the future in terms of some of its most crucial intangible aspects: inclusion, social cohesion, and anonymity.

From Backward Looking to Living the Present

Banknotes and coins are subject to constant innovation. New security features protect banknotes from counterfeiting; improved substrates increase their lifecycle and sustainability; policy decisions such as recirculationThe right to recirculate banknotes that have been checked for authenticity and sorted for fitness by banks and cash-in-transit companies. The right is normally based on rigorous rules established by the central bank. More enhance efficiency and reduce the environmental footprint of the 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.

However, this incremental approach of marginal product and service innovation is insufficient to face society’s global challenges. When anticipating the future, we naturally project images from the past.

To escape this path dependence, we need to start asking new questions. How can we shift innovation strategies from focusing on an improved version of today to one that contributes to emerging ways of creating value through the latest economic, social, environmental, and political organisations? How can we imagine a future cash model that integrates weak signals of changes in how people transact and store value?

Extrapolating Tools and Uses… Time for a Paradigm Shift

The debate around the evolution of money has been primarily dominated by technology and the underlying assumption that the digitisation of money is inevitable and desirable. Technology has been the main driver behind the digitalisation of money, or more precisely, the different waves of digitalisation.

How can we create a monetary system which challenges the narrative of a future dominated by technological innovation? How can we create a future which improves inclusion, increases sustainability, reinforces resilience and protects privacy?

Changing Concepts of Trust and Privacy Force a Rethink of Payment Systems

Trust and privacy are foundational elements of all communities. But these concepts are not static, nor should they be taken for granted. Trade-offs are being made constantly between convenience and speed versus privacy and freedom.

The anonymity of cash is one of its unique key attributes. It preserves users from both state and corporate surveillance.

However, how we own, control, and take responsibility for data is changing, including new ways of relating to privacy and trust. Exploring the futures of the monetary landscape also implies questioning existing norms and allowing the system to adapt to shifts in uses and how they will impact the future of money and cash.

Call to Action: Time for Leadership

Over time, the monetary landscape’s economic, social and institutional topography changes. Private and public money, institutional power and social experiments call for openness and ongoing innovation. Cash offers different answers to different perspectives on privacy, data, path dependence, technology and legacy investments.

It is time for the cash community to take a leadership role rather than a defensive or reactive one. The cash community needs to improve its futures literacy to detect new positions and opportunities for cash to serve economic and social ends. Using the future for different reasons, with other methods, in different contexts enables greater creativity and openness to 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. This will allow the cash community to (re)design cash and formulate experiments that test ways to reinforce existing roles or play new ones rather than taking a defensive and fatalistic view of the future of cash.

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Documents

• CE Future Monetary Landscape report 2023 VF