In a recent speech, Johannes Beermann, member of the Executive Board of the Deutsche Bundesbank, announced that to ensure that Money in physical form such as banknotes and coins. More 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.
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 Represents 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 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.
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 From 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 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 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.