Weidmann on cash: No other means of payment can replicate all its characteristics
First and foremost, paying with cash is quick, easy and secure,” Bundesbank President Jens Weidmann announced in a video message that opened the Bundesbank’s fifth cash symposium in Berlin. The event was aimed at participants from the business community, politics and public administration, and was also streamed live. As well as speeches and presentations by senior figures in these fields, the programme featured panels and roundtable discussions on cash-related issues.
Cash is also a hugely important means of payment for many people who aren’t very tech-savvy, or those with visual impairments,” Mr Weidmann remarked as he described the further benefits of coins and banknotes. And besides, an estimated 13.5 million adults in the euro area are unbanked. “
They mostly rely on cash,” he said. Cash helps people keep track of their spending as well, he noted, because they actually have to take the money out of their wallet when paying. It plays an educational role, too. “
Cash is one way of familiarising children with money,” he explained. A digital euro, which the Eurosystem is currently considering introducing, could not offer these characteristics in the same way, said Mr Weidmann. It would share some important features with cash, he noted, but would differ in other respects, thus opening up new possibilities overall. Mr Weidmann drew to a close by saying that many people hold cash dear – and rightly so. No other means of payment can replicate all its characteristics, he concluded.
In the panel discussions, experts from the business and political communities also talked about the future of cash, and whether it would be analogue or digital.
People want freedom of choice
In his closing speech, Johannes Beermann, the Bundesbank Executive Board member responsible for cash management, circled back to this topic, remarking: “
The digital euro should complement cash, not replace it. Digital and analogue forms of money – it’s not a case of ‘either/or’, but rather the coexistence of both. People want options and freedom of choice when it comes to making payments.” Mr Beermann stressed that it is thanks to the joint efforts of all the stakeholders in the cash cycle that cash payments have functioned smoothly, especially during the coronavirus crisis. “
That was crucial. After all, cash plays an important stabilising role in times of crisis and macroeconomic uncertainty.” While cash was mainly used as a store of value at that time, he explained, demand for ‘small’ denominations, which are primarily used for transaction purposes, is now also picking up again.