- giorgio79's Blog
- Log in to post comments
Frankfurt, 17 January 2024 - In a groundbreaking study, the Bundesbank has painted a vivid picture of the future of cash, unveiling three potential scenarios for its use by 2037. As digital payment methods gain ground, the fate of physical currency hangs in the balance, prompting urgent calls for action to preserve cash as a viable option.
The Digital Domination Scenario: Cash Becomes Obsolete
Imagine a world where cash is a relic of the past. The "Hyperdigital Payment World" scenario envisions a society driven by artificial intelligence and digitalization. Here, economic and societal shifts have made cash nearly extinct. Bank branches and ATMs are scarce, and coins and notes are seldom seen. In this hyperconnected future, convenience reigns supreme, but at the cost of security and accessibility.
The Cash Comeback: A Renaissance in Physical Payments
Contrasting sharply, the "Cash Renaissance Payment World" scenario predicts a resurgence of cash. Faced with global supply chain disruptions and a renewed focus on local economies, people turn back to cash. With new price rounding rules and advanced payment machines, cash becomes quick and efficient. This scenario underscores a stabilizing trend in cash usage, driven by disaster preparedness and regional purchasing.
The Hybrid Dilemma: A Divided Payment Landscape
The third scenario, "The Vanishing Hybrid Payment World," presents a mixed future. Here, cash use varies significantly by individual preference and circumstance. Retailers push for cashless transactions, and access to cash dwindles, leading to a fragmented and inconsistent payment environment. This scenario raises concerns about the erosion of consumer choice and the essential role of cash in crisis situations.
The Fight for Cash Freedom
Despite these divergent futures, one fact remains clear: the share of cash in transactions will decline. However, as Bundesbank Executive Board member Burkhard Balz emphasizes, cash is far from disappearing. The study reveals that 93% of respondents still want the freedom to choose their payment method. This preference underscores the need for policymakers and stakeholders to act decisively to safeguard cash's role.
Bundesbank's Strategic Vision
In response to these findings, the Bundesbank plans to bolster its collaboration with cash handlers and engage more with civil society. By investing in its branch network and continuing rigorous academic research, the Bundesbank aims to ensure cash remains a core component of the financial system. This commitment highlights the importance of maintaining cash's availability and acceptance amid a rapidly evolving payment landscape.
Comprehensive Research Underpins the Study
Conducted by VDI/VDE Innovation + Technik and Sinus, the study leverages extensive interviews, literature reviews, and a representative survey. These methods have identified critical factors influencing the future of cash, such as its acceptance in retail and public transport, access points like ATMs, and consumer payment preferences.
The Bundesbank's study sends a clear message: while the future may see a decline in cash usage, its preservation as a choice for consumers and a safeguard in times of crisis is essential. As digitalization advances, the battle to keep cash alive is one that policymakers, banks, and society must wage together.
Source: https://www.bundesbank.de/en/tasks/topics/bundesbank-study-the-future-of-cash-use-922096
