Cash in the form of coins and notes has existed for centuries, whereas cashless payments have only been around for a few decades. Having said that, credit cards, debit cards, online banking, and platforms, such as PayPal and GooglePay, are strictly speaking just transactions using non-physical money. The amount is debited from the customer’s bank account and credited to someone else. At present, there is no genuine digital money guaranteed by governments as legal tender that can be used in every situation without the need for a bank account. “But that’s set to change,” according to Raoul Herborg, Business Lead Digital Currencies at Giesecke+Devrient. The Covid-19 pandemic has accelerated the trend that an increasing number of people around the world prefers to use digital payment methods.
None of the many payment options on the market currently fully meets the various needs of governments, businesses, and consumers. “Central bank digital currencies actually come very close to checking all those boxes. They combine the advantages of cash with the convenience and speed of cashless transactions,” says Herborg. Development of these currencies is therefore well under way. The European Central Bank (ECB) will decide by mid-2021 whether to launch a digital euro project. China has already announced that a central bank digital currency will be in circulation in time for the 2022 Winter Olympic Games. Many other countries, including India, South Africa, Canada, and Japan, are expected to follow suit.