The steps required to promote digital currencies

Marion Laboure

In this episode

As the pandemic has accelerated the digital cash revolution, there are several things companies and policymakers need to do to respond.

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What we discuss

Worldwide lockdowns and social distancing measures have only increased the use of cards over cash.
The race is led by Sweden and China and both have started piloting e-currencies earlier this year.
Although both countries share these common factors, they each have a distinct motivation for developing a CBDC. China explicitly set up its digital currency to improve financial inclusion. Sweden, which has a very high financial inclusion rate, is pursuing its CBDC simply as a natural next step; after all, Sweden already has one of the lowest cash payment rates in the world at about one per cent of GDP.
It is imperative that the US and Europe catch up.
To respond, companies and policymakers must design alternative to credit cards and remove middle man fees.
For now, the priority must be on regional digital payment systems.
In the long term, central bank digital currencies will replace cash.