CBDC

The future of cash is shaped by geopolitical tensions, digital developments, monetary innovation and consumer preferences. Will cash remain a global stabilizer or fade into obsolescence? The answer lies in navigating uncertainty, regulation, and technological change. What future do we want for cash?

The re-election of Donald Trump has strengthened the influence of BigTech, fostering closer ties between tech giants and the U.S. government. As tech companies expand into financial services and cryptocurrencies, concerns about privacy, financial censorship, and dependence on digital infrastructure grow. Cash remains a crucial counterbalance, offering privacy, economic freedom, and resilience during crises.

As an increasing number of central banks investigate the opportunity and feasibility of a CBDC, it appears that they are not a silver bullet and present both pros and cons. The key to their success comes from properly designing these digital currencies and the core motivations and use cases behind their adoption.

Despite the massive adoption of mobile payments in China, cash in circulation grew rapidly in 2022.

As more central banks investigate and develop digital currencies (CBDCs), we look at the adoption and use of those launched and the implications for cash.

Following exceptional growth in 2020, cash demand has returned to 'normal' growth in 2021. Looking forward, the rapidly rising interest will increase the opportunity cost of holding cash, while geopolitical tensions will increase the precautionary motive to keep cash.

The House of Lords’ Economic Affairs Committee report concludes there is no convincing case for a central bank digital currency (CBDC). While a CBDC may provide some advantages, it could pose significant challenges for financial stability and the protection of privacy.

Crypto incumbents defend themselves from regulation and scrutiny, befriending and hiring former (and current) regulators and politicians. However, top U.S. regulators remain skeptical of cryptocurrencies.

As global payments revenues exceed $2 trillion or 2.2% of the world's GDP, a growing number of stakeholders are vying to capture market share. Can cash compete in the new space race?

The European Central Bank (ECB) concluded its public consultation on the digital euro last week and received over 8,221 responses, submitted by citizens, firms and industry associations. Payment privacy is the most requested feature for the potential digital euro.

The COVID-19 pandemic has had far-reaching consequences on human and economic activities, including on cash, payments and money. For many observers, the pandemic has acted as a catalyst and accelerated existing trends. Five key challenges will shape the future of cash.

A case before the top European Court could have important implications for the status of banknotes and coins as legal tender and the acceptance of cash. In this second part, we analyse the link between legal tender and the exercise of fundamental rights. We also look at the implications of legal tender for a central bank digital currency (CBDC).