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Shaping the Future of Cash in an Uncertain World

Categories : Future of Cash
December 4, 2023
Tags : CashTech, Future of Cash, Future of Cash conference
The Future of Cash conference in Istanbul saw some big conversations about cash today and its future. The mood was more upbeat this year as transactional demand for cash has primarily rebounded from the lows of the pandemic, and the access to cash agenda has gathered pace in countries facing the reality of less cash.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

Opening seminar – Cash as a public good, a basic right

The opening seminar addressed whether cash was a public good or a basic right. Héctor Labat from CashEssentials opened with a literature review of the topic, and this was followed by presentations by Tim Stuchtey of the Brandenburg Institute for Society and Security (BIGS), Frédéric Allemand from the University of Luxembourg, Carin van der Cruijsen from de Nederlandsche Bank, Franz Seitz from the Weiden Technical University of Applied Sciences and Ursula Dalinghaus from Ripon College. This interdisciplinary approach illustrated how some of the unique attributes of cash – resilience, inclusion, economic stability, and public money – contribute to the public good.


Franz Seitz. Future of Cash Conference

If cash is regarded as a basic right, then the state has a role to provide, subsidise and mandate the acceptance of cash, so these were important discussions. Is cash a public good because of its usefulness in filling gaps that other payment tools don’t serve, privacy, for example?

While no definitive conclusion was reached, the room changed from an initial view that cash is a public good to one that cash is a basic right. It appears that cash does not meet the non-rivalrous criteria of the economic definition of a public good, i.e. the consumption by one individual does not deprive others.

Some time was spent on the cost of cash and the issue of surcharging, i.e. charging consumers directly for the cost of payment. In New York State, receipts show the card processing fees merchants pay. From anecdotal comments from the audience, it appears it is becoming common for restaurants to have a cash price and a digital payment price. The Frankfurter Allgemeine paper has also recently reported on this in Germany. This became a requirement in Canada in October 2022. When these costs are pointed out to consumers, their payment behaviour changes.

Setting the scene

The Central Bank of Türkiye introduced the dynamics of its cash cycle and the challenges of managing cash in a country with high inflation levels. While people store value in foreign currency, cash is still required for transactions, although the denominational mix changes quickly. Banknotes increased from 1.2 billion in 2013 to 4.8 billion today, with 67% of the volume in the highest denomination.

The Federal Reserve questioned whether cash in the US has reached a strategic inflexion point. Dynamic volumes, the cash paradox, and rising costs create uncertainty. The Fed is investing significantly in its printing facilities, vaults, processing machines, and automation and plans to release a new series of banknotes. The private sector, however, has moved away from investing in the cash infrastructure to investing in all things digital.

Finally, the European Central Bank (ECB) presented its 2030 Cash Strategy. Perhaps the key point was that transactions and the store of value must work well to ensure resilience. The draft EU regulation on the legal tender of cash will require member states to monitor access to cash e.g. by measuring the geographical coverage and capacity of ATM networks; some countries are already taking policy measures to mandate that banks ensure access.

Understanding the cash paradox

Antti Heinonen analysed cash in circulation data from around the world to provide the complex data for many much-talked-about observations – that banknote growth rates returned to normal in 2021, following exceptional growth in 2020, that accumulated cash stocks have not returned to central banks and that a combination of inflation and higher interest rates have reduced cash demand. Perhaps a key observation was that recent events don’t suggest that trust in physical cash can be transferred easily into a digital currency in a crisis.

Magyar Nemzeti Bank (MNB) described its technique for determining cash demand patterns. The ratio of income to the total value of transactions gives the velocity of money. This indicator can filter out the income effect of cash demand. Using this in its analysis of recent events, MNB has determined that a turbulent economic situation results in permanently high cash holdings regardless of a macroeconomic environment that encourages a decrease in cash holdings.

Monnaie de Paris reported on its annual IFOP survey on France’s usage and perception of cash. The results showed considerable affection for cash and a high usage level. There have been significant increases in the preference of cash for precautionary holdings (61% in 2021, 67% in 2023) and budgeting (52% in 2021, 61% in 2023).

Cash cycle in a digital world

NatWest, one of the UK’s big four high street banks, explained its work on cash. This is driven by its customer research and the need to work with the UK’s new legislation on access to cash.

The focus is very much on helping customers with the transition to a digital world. In the short term, NatWest is actively looking to support customers by adapting to digital solutions, maintaining access to cash through more automation, providing local services and supporting the development of banking hubs. It aims to reduce costs and increase efficiency while preserving cash provisions through shared wholesale infrastructure and, possibly, a utility model for ATMs.

Meanwhile, SBV Services and BankservAfrica described the complex and challenging cash environment in South Africa. They told a society that is becoming both digital and cash-based. Things are changing, and innovation and cooperation by and between stakeholders will help meet changing consumer behaviour.

Round table conversations

Seven topics were chosen, and a facilitator introduced each one. Delegates self-selected two they wanted to join to spend 45 minutes discussing and debating key points. This was an opportunity to learn, challenge, and think with others about key cash-related topics.

While some were, perhaps, apparent – for example, access to cash, acceptance of cash, redesigning the cash cycle, cash and CBDCs – others were less so – how to fund the cash cycle, CashTech and Innovation Sustainability, cash and crises.

The results of the discussions were fed back in a separate session, but it was clear that lively debate had ensued, and this was a valuable session.


Christopher Baud-Berthier laid out the Banque de France’s (BdF) work on sustainability across production, distribution and end-of-life.

In 2023, BdF moved to using 100% sustainable cotton. By 2025, 65% of its cotton will be organic or fairtrade; by 2027, this will be 100%. It has made major changes, reducing its CO2 emissions from printing operations by 30% between 2019 and 2022. BdF is creating a new printworks. It has set itself the goal of reducing emissions by 2026 50% compared with 2019.

Management models

Bantas, owned by three major banks in Türkiye, provides cash processing, cash in transit, ATM, branch and retail services. The starting point of this presentation was that banks currently pay 65% of the cost of providing cash, retailers pay 25% and central banks the rest. 20-30% of the cost of cash operations can be saved through multi-bank collaboration by eliminating inefficiencies, economies of scale, focus and transferring risks.

As the presentation demonstrated, this is not straightforward, but it is possible, and the benefits are real.

Redesigning the cash cycle

The Dutch National Bank (DNB) presented the Dutch experience of dealing with the realities of a less cash world, particularly the withdrawal of commercial banks from cash services. While creating a utility ATM model based on Geldmaat has been one part of the story, the Dutch Treasury has also been prepared to bring forward legislation to support access to cash. Currently, a ‘covenant’ model is in place between cash stakeholders. This has not proved enough to safeguard access to cash and a robust cash infrastructure.

The Bundesbank described a major two-year research project looking at the future of cash in Germany. No results are yet available.

The Royal Canadian Mint (RCM) reported on the recent Mint Director’s Conference on its sustainability actions and what research into Canada’s payment methods and trends says about the future of coins. The RCM identified the risks of insufficient availability of cash driven by digital payments displacing cash, leading to increased social and economic inequality. This highlighted the importance of a multi-payment system where cash co-exists with e-payments.

The Canadian payment survey confirmed cash as remaining relevant to daily life and commerce, particularly for low-value transactions. Inflation and the cost of living challenges may lead to hoarded coins being spent. Cash acceptance is not a significant issue. Now that credit card surcharge fees are visible, this could lead to more cash and debit card usage. Most Canadians do not plan to go cashless.

Resilience by design

Resilience is an essential area of interest in the face of a series of natural disasters and a range of conflicts worldwide. In every case, cash plays an important role. This session saw the Brandenburg Institute for Society and Security describe an essential piece of research that it has done in this area in cooperation with the Bundesbank and further work planned.

James Shepherd-Baron, a disaster risk consultant, talked about his real-life experience of the role and importance of cash in disaster areas.

Finally, Alper Sayin from Garanti BBVA gave a real-life example of what happened in Türkiye when earthquakes struck the country in February. This was an outstanding story of how well-prepared and carefully rehearsed plans worked when earthquakes that killed 60,000 people and put two cash centres entirely out of action hit the country.

A new narrative for cash

Brett Scott, the author, explained how digital leaders have created and driven the story that digital is good and analogue is terrible. He used the work of Visa and Mastercard in the payment landscape to illustrate what has been done and to challenge the audience to think about regaining control and changing the conversation.

Brett Scott. Future of Cash Conference.

If one argues for cash in the context of the digital narrative, the chances of breaking through are significantly less than if the debate is reframed. Key ideas lie in autonomy compared with dependence, public infrastructure versus private infrastructure and the broad limitations of a digital world.

The conversation changes if one talks about cash as the bicycle of payments. A building with emergency stairs has been built with the necessary critical infrastructure. It is not old-fashioned or left behind.

The conference room was split into working groups to see if they could devise a billboard, social media, or guerilla marketing campaign to present cash as a positive choice without falling back into a defensive crouch shaped by the war on cash.

It was a fascinating exercise that revealed natural creativity, ranging from Banksy-style artwork with cash in the image and a TikTok series of clips showing cash being used in situations where only cash works well. Potential slogans such as ‘Cash: more than a beer token’, an image of Visa’s annual profit, and the line, ‘Nothing is for free’ do not make the public space! They should.


The final session of the conference focused on innovation, including three awards sponsored by Sesami, which went to:

Also, in this session, Banco de España presented its Neurocash solution for helping banknote designers optimise the reaction of banknote users to their design. A perception study combined with tracking the physiological response and human behaviour tracking of people reveals their implicit and explicit reactions to a design. This offers benefits in production, the answer to faults, circulation and communication campaigns.

On cash cycle optimisation, Barry Röhrs presented a methodology for analysing cash and cash cycles used in South Africa and elsewhere. The approach has been designed to identify opportunities to innovate to achieve objectives such as increasing efficiency in the cash cycle or allowing cash and digital payments to work together.

Final word

The content and approach of this conference were not just recording where we are and repenting why we aren’t where we want to be. It asked real questions and offered case studies of different approaches, initiatives and strategies. It covered everything from policy to sustainability to efficiency—a beneficial and unique event in the conference calendar.

This post is also available in: Spanish