Tag: cash

The following diagnosis is undisputed: in Germany, but especially in other European countries, the use of cash is declining. Cashless payment, on the other hand, is on the rise. Would a  central bank digital currency, in our case the digital euro, be a good policy response in this situation? Only a few countries around the world have already introduced so-called “CBDCs” (central bank digital currency), but hardly any central bank is not discussing or planning it. The European Central Bank has been considering the introduction of a digital euro since Ovtober 2021, and the European Commission recently presented a legislative proposal to that effect. However, it is by no means generally accepted yet that the digital euro is needed at all.

In this episode, eFin & Democracy takes a closer look at the digital euro’s promise to be “digital cash”. We first clarify what cash is, what it can do, and how exactly its advantages could be replicated in a “digital” euro. In our everyday dealings, we are hardly aware of it: What distinguishes cash as public, state-guaranteed money in the first place, what are its qualities? Should the decline in cash use bother us? And what is driving the declining use of cash in the first place? 

The podcast sets out to answer those questions, explains the role of commercial banks and payment service providers in analog and digital payments, and sheds light on the anonymity and participation that cash promises. The big question remains how such qualities can be translated into the digital space.