As we are aware, the use of cash is most certainly not being promoted with the same vigour that the use of electronic or mobile payments has been in recent media and advertising. This naturally leads to the question ‘are central banks, as responsible for the policies that define payments, really aligned with the still relevant need for cash that citizens need?’

The Bank of England’s 2023/24 report outlines significant activities related to banknotes, payments and digital currency. Banknote value and volume in circulation was flat but net seigniorage income was up 153%. The Bank continues to make progress on its net zero carbon goals.

The ‘Privacy Paradox’ is where people claim more concern with privacy than their actual behaviour indicates. This ‘say-do gap’ exists in many areas, including the need for cash to be maintained, but despite that, it means organisations are forced to respond.

The Bank of England (BoE) has published its approach to innovation in money and payments, proposing a programme to test infrastructure that supports the settlement of central bank money against digital assets such as stablecoins, tokenised deposits and other innovations. The Bank has published previous papers on the regulation of stablecoins, innovations by deposit-takers and CBDCs.

Tobias Adrian, International Monetary Fund (IMF) Financial Counsellor and Director of the Monetary and Capital Markets Department, spoke at the International Symposium on Central Bank Independence in Stockholm at the start of the year. His topic was maintaining central bank independence alongside the development of payments and Central Bank Digital Currencies (CBDC).

In this new periodic series, we will cover in brief the news and information in various countries’ central bank annual reports as they relate to cash and payments, starting off with Ireland, Rwanda and Bhutan.

The ability of private citizens to execute electronic transactions using a Central Bank Digital Currency (CBDC), central bank money, introduces new monetary stability challenges. A paper by Harald Uhlig from the University of Chicago considers this. The paper is highly theoretical but raises the sort of questions central banks have to get right in their planning for a CBDC.

The role of Currency Issue Director is great preparation for high office in a central bank. Ask Andrew Bailey, Governor of the Bank of England, or Michelle Bullock, soon to be Governor of the Reserve Bank of Australia, both of whom have managed currency in their banks. What makes it such good preparation?

Artificial Intelligence (AI), Machine Learning, ‘big data’ and ChatGPT have now reached the public consciousness in a big way, hence headlines such as ‘Central Bank of Ireland blocks ChatGPT for staff as financial services firms grapple with AI’ and ‘China’s Central Bank Warns Against ChatGPT ‘Data Leaks’.

The European Money and Finance Forum has recently published a useful paper on big data and machine learning in central banks.