Hyperdigital currency ahead!

Last Updated: 24. Januar 2024By

The German Federal Bank is currently conducting a study to investigate how cash will be used in the future. The study outlines three different scenarios for cash payments in the year 2037. These scenarios are not predictions, but rather possible future scenarios. The German Federal Bank aims to gain an understanding of the societal and economic environment in which cash will be embedded in the future, in order to derive possible actions from it.

The future scenarios are intended to contribute to making the right decisions in order to ensure that cash remains an attractive, widely available, and accepted means of payment and store of value in the future. The Federal Bank has a legal mandate to provide sufficient high-quality euro cash at all times in Germany.

The Federal Bank study is based on three future scenarios. The study, commissioned by the Bundesbank, was carried out by the service company VDI/VDE Innovation + Technik and the opinion research institute Sinus from February 2022 to November 2023. It identifies key factors, based on interviews with scientists, cash actors, central banks, and social organizations, as well as a comprehensive literature review and a representative online survey, that could influence the future development of cash.

Some key factors include the general acceptance of cash, for example in trade or public transportation, access to cash through ATMs or at the checkout, consumer requirements for payment methods, and the prevalence of various non-cash payment methods.

The scenario „The hyperdigital payment world“ describes a highly digitized world in which cash has almost disappeared from the daily lives of most people, with few bank branches or ATMs available and cash withdrawals at the checkout no longer possible, as cash payments are rarely accepted in stores. The scenario „The payment world in the cash renaissance“ describes a partial return to cash and its advantages.

The stabilizing function of cash is at risk in times of crisis. In this scenario, the use of cash initially decreases but stabilizes in the 2030s. The scenario „The disappearing hybrid payment world“ reflects an environment in which the use of cash is heavily dependent on people’s circumstances. Customers are encouraged to use non-cash payment methods in stores. Access to cash deteriorates steadily and the use of cash slowly fades away.

In none of the future scenarios does cash completely disappear. However, in two out of three payment worlds, access to cash and its acceptance are not fully guaranteed. This means that the freedom of choice is practically nonexistent and the stabilizing function of cash in times of crisis is at risk.

Bundesbank conclusion: Freedom of choice is demanded! The study shows that maintaining and widely using cash is not a given. In the representative survey, 93% of respondents stated that they want to continue to decide for themselves whether to pay with cash or non-cash. All actors in the cash cycle and policymakers must take action to meet this demand for freedom of choice in payment transactions.

To address these challenges, the Bundesbank aims to increase cooperation with cash actors and dialogue with civil society. In order to fulfill its legal mandate in the future and ensure cash as a physical core product, the Bundesbank will invest in its efficient and future-proof branch network and continue its analysis of cash.

My conclusion: Cash has no future! ATMs and bank branches are already apps on your mobile devices. The digital trend and the pressure on all market participants and users to further digitize and tokenize will continue to increase significantly. For me, cash has no future!

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