financetechnologyprivacyeconomypolicy
Governments should phase out physical cash and transition fully to digital currency.
Well-designed CBDCs can make payments faster and cheaper while reducing cash handling and security costs.
Reducing large-value cash use can hinder tax evasion and money laundering that exploit cash’s anonymity.
CBDC design could enable targeted transfers and new monetary policy tools, depending on choices like account vs. token models.
Cash preserves privacy by enabling payments without pervasive data collection or tracking.
Digital-only systems risk excluding people without bank access, smartphones, or reliable internet.
Payments that rely on networks and platforms face outage and cyber risks that can disrupt commerce.
Proponents argue that CBDCs could deliver cheaper, faster payments, reduce cash-related crime, and expand central bank policy options. Opponents emphasize privacy, inclusion, and resilience: cash enables offline, anonymous transactions and serves people without digital access, while cyber or infrastructure failures can halt digital payments.
Cashless payments have grown with cards and mobile apps, and many central banks are exploring CBDCs to modernize payment rails. Policymakers debate how to balance efficiency gains with safeguards for privacy, inclusion, and operational resilience before considering any phase-out of physical cash.