A central bank bigwig said that cash is disappearing as he made the case for a central bank issued digital currency (CBDC).
The Bank of England’s deputy governor for financial stability, Jon Cunliffe, said that cash is in decline while the popularity of digital payments technology is on the rise.
“Central bank state-issued money is disappearing,” Cunliffe said on “The Swap” podcast from the International Swaps and Derivatives Association. “It’s no longer a full service settling assets. There are places in London where you can’t use it in face-to-face transactions.”
“These technological developments won’t stop just because we don’t provide a CBDC,” Cunliffe said. “Cash is going to disappear, and the question is going to be what role can a CBDC play.”
The comments come after the Bank of England and HM Treasury launched a joint consultation on whether to launch an electronic version of the pound, dubbed ‘Britcoin.’
In recent years payments by debit and credit card have overtaken UK cash transactions. The popularity of crypto currencies has also helped to underscore a gap in the market for ultra-fast, cheap payment technology which could be filled by CBDCs.
Country’s worldwide have launched digital versions of their national currencies backed by the central bank. Most recently Nigeria launched the eNaira whilst China’s eYuan trial has already reached 20m people making the East Asian superpower a frontrunner in the field.
The EU has previously said it hopes an electronic euro will be operational by 2025.