Benoît Cœuré of the Bank for International Settlements (BIS) believes that physical cash will retain its importance in the market.
BIS: cash will stay with us
“In the euro area, unlike in Sweden or China, the demand for banknotes is still high”
– He said Cœuré on Thursday. He added that:
“Their role as a means of payment is declining, but they remain a means of savings. Nobody wants to force consumers to choose payment methods. Diversity is a good thing and fosters innovation. The aim is to provide choice, which means allowing consumers to continue paying with the currency issued by the central bank “
– he informed.
However, Cœuré also introduced the topic of the digital currencies of central banks (CBDC). He described innovation as a natural part of economic growth, mentioning the different attitudes and pace of development in the CBDC sector in different countries, as well as Facebook’s Libra.
It is worth remembering that China is currently the leader in the CBDC emissions race, while the United States has adopted a more wait-and-see attitude.
CBDCs can in principle completely remove physical cash from circulation, which is causing controversy today. However, it is worth remembering that – depending on the country, of course – many currencies are already digital. Anyway, it is no secret that today there is more money in circulation than banknotes or coins.
CBDC can mean a lot – it is possible that they will be projects based on blockchain technology or simply ordinary fiat currencies without notes and coins.
“The digital currency of a central bank is simply the digital equivalent of coins and banknotes – the most secure of all currencies, issued by a public institution”
Said Cœuré, adding:
“In the future, you will be able to pay for your coffee in different ways: of course with banknotes and coins that will remain available for as long as necessary, but also by bank cards, digital currency issued by a central bank, payment systems such as Apple Pay, PayPal or ( …) Libra ”.
Cœuré even mentioned Bitcoin (BTC):
“If you want to pay in Bitcoin … why not if you and the trader understand and accept the risks associated with this active cryptocurrency.”