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BIS head says physical cash still important

BIS Innovation Hub head Benoît Cœuré believes that physical cash will retain its importance.

Cœuré mentioned in an interview on Thursday:

“In the euro area, unlike Sweden or China, demand for banknotes is still strong”. “Their role is declining as a means of payment, but they remain a means of savings.” 

“No one wants to force consumers to choose their payment methods. Diversity is a good thing and it fosters innovation. The goal is to offer choice, which means allowing consumers to continue paying with currency issued by the central bank,” he added.

CBDCs basically hold the potential for removing physical cash altogether. And CBDC could also mean a blockchain-based solution.

“Central bank digital currency is simply the digital equivalent of coins and banknotes the safest currency there is, issued by a public institution,” Cœuré said, he also added: 

“In the future, you will be able to pay for your coffee in various ways: Obviously with banknotes and coins, which will remain available as long as necessary, but also with bank cards, digital currency issued by the central bank, payment systems like Apple Pay, PayPal or when an adequate regulatory framework has been decided with Libra.”

Cœuré also mentioned Bitcoin (BTC) as a viable payment route:

“If you want to pay in Bitcoin, why not, if you and the trader understand and assume the risks associated with this active crypto.”

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