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Germany Shapes the Future of Cash with Strategic Foresight

Categories : Future of Cash
July 12, 2022
Tags : Central Bank, Future of Cash, Futures Literacy, Germany
The German central bank is working with strategic foresight researchers to create different future plausible scenarios for cash in Germany in 15 to 20 years. The objective is to steer the future of cash and be prepared for future challenges.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

In a recent speech, Johannes Beermann, member of the Executive Board of the Deutsche Bundesbank, announced that to ensure that cash remains an “attractive, reliable and competitive means of payments,” the central bank cannot afford to react to the changing environment passively but needs to shape its future proactively.

Looking Beyond Forecasting

This requires looking beyond forecasting, which consists in making short-term predictions based on historical trends. The Bundesbank is working with foresight researchers to analyze the multitude of possible futures and identify plausible and desirable futures. “The development of strategies and scenarios enables conscious, value-oriented action – based on evidence,” said Beermann.

The research will focus on two main segments: the cash cycle stakeholders – which other central banks are also analyzing focused on guaranteeing future access to cash – and the potential users of cash. The Bundesbank will investigate for each scenario who will use cash, where, why and for what types of transactions.

Identifying Key Tensions Shaping the Future of Cash

Following the design of scenarios, the exercise will identify critical tensions that will influence future developments. This includes weak signals as well as disruptive events. One evident disruptor is digitalization, which has heavily impacted the nature of money and cash. But the digitalization of money also creates new risks and challenges. This includes vulnerability in the case of power outages or extreme weather events. The exponential development of cybercrime, from hacking to identity theft to ransomware, illustrates the need for more resilient infrastructure.

The Bundesbank expect to report on the scenario-planning process in the spring of 2023. “To the extent that the decline in cash usage is not due to demand-side but supply-side adjustments, central banks need to pay close attention. Being neutral with respect to consumer choices does not mean that we remain passive,” concludes Beermann.

CashEssentials’ Futures Literacy Lab

CashEssentials will be holding a Futures Literacy Lab on the role of cash in the future monetary landscape. This advanced, field-tested methodology will take participants beyond deterministic extrapolations and techno-fatalism to examine changes inspired by open and creative futures.

The Lab will be built around three three-hour sessions on 7 September (remote session), 8 September (remote session) and 14 September (in-person). For further information or to register, click here.

This post is also available in: Spanish