With 14% of central banks at the pilot stage of exploring a possible future Central Bank Digital Currency (CBDC), this paper seeks to address three related questions; What would be the demand for a CBDC?, How would different design attributes affect demand?, and To what extent would a CBDC impact the demand for cash and deposits?

This paper looks at the implications of currency substituting that go beyond the functions of central banks, to consider the key differences in monetary policy and LLR, and to assess the implications and risks of currency substitution and how they vary between countries.

The Bank of Canada has considered what the impact of introducing a cash-like, deposit-like or universal CBDC would be on consumption, banking and welfare.

Philip Lowe, Governor of the Reserve Bank of Australia (RBA), spoke recently at a conference about the future of payments in Australia. He said that the direction of change was ‘pretty clear’.

Post offices are often proposed as a solution to providing access to cash. The US Center for Monetary and Financial Alternatives have argued that this is to fundamentally misunderstand the case of the unbanked.

12 editions of Cash & Payment News™, 12 weeks of Digital Currency News™. What have we learnt? What has changed?

BankServ Africa builds and operates essential payment infrastructure in South Africa and 20 other countries. It operates as a utility with a mutual ownership structure of Nedbank, Absa Bank, the Standard Bank of South Africa and FirstRand Investment Holdings.

A paper by the Einaudi Institute for Economics and Finance (EIEF), ‘Cash: A Blessing or a Curse?’, examines what happened in Mexico when changes to cash availability were made.

Amazon has announced that from 19 January 2022 in the UK it will stop accepting Visa credit card payments due to their high cost. This follows the post-Brexit removal of the interchange cap imposed by the European Commission. Amazon has also introduced surcharges on Visa credit cards in Singapore and Australia.

Westpac, a major Australian bank, has re-designed its point-of-sale (POS) terminals to help blind and visually impaired people use them more easily. 110,000 machines are being changed for Android-based devices with new functionality.

David Fagleman, of the consultancy Enryo, has recently presented and written about cash in circulation (CIC). He makes the case that CIC data provided by central banks is unhelpful because it overstates the case for cash usage and creates confusion about what is actually happening.

In November 2021 the Euro Retail Payments Board (ERPB) Working Group on Access and Acceptance of Cash ERPB issued its report.

The UK is facing significant pressure on its cash infrastructure, sufficient to put access to cash on the political agenda. 2021 draws to a close with a major announcement that some of the largest UK banks will create a network of shared banking hubs to maintain cash facilities for communities where cash services have ended.

The Turkish lira is sharply down in value this year, over 40%. On 24 November bitcoin hit a new all-time high after the lira dropped 15% on the news of President Erdogan defending the reduction in interest rates in Turkey at a time of 20% inflation.

When one looks at the pandemic data it consistently shows a drop in cash usage, as it does here in Belgium. However, the nuance perhaps points to a different story.

OMFIF’s Digital Monetary Institute has worked with Giesecke + Devrient (G+D) to issue a paper ‘Consumer Attitudes to CBDC: considerations for policy makers’. The paper includes an introduction to CBDCs and an overview of the rationale for CBDCs, the work being done around the world and the challenges being addressed.

At OMFIF’s European payments and digital assets conference CBDCs were on the agenda. Wholesale CBDCs are more familiar ground for central banks since they can be regarded as exploiting a technological opportunity rather than a major structural change.

Four recent stories about digital payment crime highlight the changing profile of financial crime from payment cards to cryptocurrencies.

The latest Bank for International Settlements (BIS) Innovation Hub has been opened by the Federal Reserve Bank of New York, joining Hong Kong, London, Singapore and Switzerland.

There is an assumption that cash is a driver of the shadow economy, but this is not proven by empirical evidence. Occasional paper 649 from the Banca d’Italia used the decision to increase the limit on cash usage as an opportunity to study what happened to cash and the shadow economy.