With so many countries across the board dealing with their sentiments about central bank digital currencies (CBDCs), Benoit Couret of the Bank for International Settlements believes that physical cash will retain its relevance. Couret headed the innovation wing at the Bank for International Settlements, and previously held a position at the European Central Bank on its Executive Board.
"In the eurozone, unlike in Sweden or China, demand for banknotes remains strong," Couret said in an interview on Thursday. "Their role is diminishing as a means of payment, but they remain a means of saving." He added:
"Nobody wants to force consumers to choose their own payment methods. Diversity is a good thing and it fosters innovation. The goal is to offer a choice, which means allowing consumers to continue paying in the currency issued by the central bank."
Couret has made many points on the global central bank digital currency scene. He described innovation as a natural part of growth, pointing to the changing attitudes and pace of other countries towards central bank digital currencies, in addition to Libra on Facebook.
China, in particular, has made its way in the race for the central bank's digital currency, while the United States has taken a wait-and-see approach.
Central bank digital currencies have the potential to completely remove physical cash - a positive or negative outcome, depending on one's point of view. Depending on the country, some regions, such as the United States, are already digitally working. Central bank digital currency could mean providing a blockchain-based solution. It may also include banking with the Federal Reserve rather than commercial banks, depending on which path the United States is taking.
“The central bank’s digital currency is simply the digital equivalent of coins and banknotes - the most secure currency issued by a public institution,” Corre says, adding:
`` In the future, you will be able to pay for your coffee in different ways: using banknotes and currencies of course, which will remain available as long as necessary, but also using bank cards, digital currency issued by the central bank, and payment systems such as Apple Pay or Paypal or - at Decide on an appropriate regulatory framework - using Libra.
Couret even mentioned Bitcoin (BTC) as a viable payment method: "If you want to pay with Bitcoin, why not, if you and the trader understand and take the risks associated with this active cryptocurrency."
Physical cash carries important characteristics that may not be available in central bank digital currencies, such as availability during power outages.
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