Electronic cash might be the future, but it is still unclear what payment innovation it offers for the public, certainly in the euro area. And it is unlikely to fully replace the comfort the consumer feels in having money under the mattress.
This opinion piece was originally published in the Money Review section of Kathimerini and is forthcoming in El Economista.
Central banks often update the money they issue to include new features. The next update will be to introduce a digital version of cash. Central bank digital currencies (CBDCs) are the closest alternative to a wallet of cash, except they come in a digital format and in electronic wallets that are stored by a country’s central bank.
CBDCs aim to mimic two crucial physical properties of cash. First, the holder remains anonymous: