The first quarter of the 21st century has witnessed a major change in payments across the world. Many payments traditionally made in cash have been replaced by frictionless and convenient options that eventually become widely accepted and change consumer payment behaviour.

As the global payments landscape evolves, Asia’s currency trends offer invaluable insights into the future of cash and digital payments. This analysis by De La Rue’s Richard Sokl, who also spoke about this at the HSP Asia conference, considers the dynamics of cash’s enduring role, the challenges posed by the digital divide, and how currency strategies are adapting to meet diverse needs.

60 people met in Jakarta at the end of September last year for a summit by the Asian Cash Management Association (ACMA). They came from a range of stakeholders across cash cycles in the region, including central banks, Cash Management Companies (CMCs) and commercial banks.

Research has found that paying with cash is associated with pain and that people tend to spend less using cash rather than a payment card.

While consumer payments are changing, cash continues to flourish. However, there is a need to address some of inefficiencies in cash handling if cash is to thrive.

OMFIF, in partnership with Giesecke+Devrient, is publishing a report in February exploring the factors contributing to the hesitation about launching a CBDC and what concerns central banks struggle with. In the report’s survey of central banks, 81% of respondents have issued or expect to issue a CBDC at some point, with 47% expecting to issue one within five years.

At the Coin Conference in Lisbon Martina Horakova, Managing Director, International Mint Industry Association (IMIA), presented European Economic Area legislations and proposals ‘in favour’ of cash access and acceptance.

The Reserve Bank of New Zealand (RBNZ) has published the results of its consultation on a possible CBDC. The consultation had the highest response rate of any RBNZ survey, with more than 500 individuals and groups writing in, as well as 18,000 online survey responses.

While the United States and Brazil debate the use of bitcoin in their international reserves, the Banco Central de Chile, in line with its Governor's firm commitment to cash, categorically rules out this possibility, arguing that crypto assets do not meet the legal or technical criteria for their inclusion.

The Bank of England (BOE) and the Massachusetts Institute of Technology Digital Currency Initiative (MIT DCI) have published a paper exploring privacy enhancing technologies (PETs) for a possible digital pound.

Mobile money transactions in Kenya surged to KSh6.5 trillion in the first nine months of 2024, reflecting a 13.2% growth compared to KSh5.8 trillion during the same period last year.

The European Central Bank (ECB) is half-way through its assessment work about whether to launch a CBDC. This has involved extensive consultation. It has published its second progress report on its preparation phase of a digital euro.

Access to cash has become a key area of interest for central banks. The Bank of Canada has compared subjective perceptions of cash accessibility with distance based metrics and published their findings in a staff analytical note.

Programmable payments are often talked about in the context of Central Bank Digital Currency (CBDC), but they are possible with any digital payment. The Federal Reserve of Atlanta has written a useful blog explaining them.

The European Commission is preparing to introduce new rules on cash payments in order to fight against money laundering.

Russia’s Ministry of Industry wants a two year transition before mandatory adoption of a digital ruble. It is concerned that the necessary infrastructure is not ready. It is currently planned to become mandatory for large retailers by July 2025.

The Federal Reserve Bank of Kansas City has written a paper investigating who is underserved when it comes to digital payments, the starting point for working out how to include them in today’s digital economy.

Bank Indonesia (BI) has published a paper on a technical proof of concept (PoC) for a wholesale CBDC (wCBDC). BI had compared R3’s Corda enterprise blockchain and Ethereum-based Hyperledger Besu, but the report did not make a definitive choice at this stage.

At the 2024 Association for Financial Professionals national conference in the US treasurers from Starbucks, Staples and Inspire Brands (who run a number of US restaurant chains) explained the benefits of using smart safes for cash management.

While the revolution in information and communication technology, the emergence of China as a global manufacturing exporter, and the expansion of global value chains in the 1980s started a new phase of globalisation, the relatively recent rise in e-commerce and direct-to-customer sales, facilitated by online retail platforms, is leading to a new feature of international trade, namely an increase in the number of low-value transactions.