Earlier this month, the National Bank of Denmark Governor, Signe Krogstrup, delivered a speech arguing that the decline in the use of cash does not necessarily justify the issuance of a retail central bank digital currency (CBDC). This view is in sharp contrast to that of the European Central Bank (ECB), which says that a retail CBDC will be essential to ensure that consumers still directly own government-issued money as cash usage decreases.
In his speech, Mr. Krogstrup discussed some of the implications of the decline in the use of cash and the rise of digital payments for the central bank’s assessment of CBDCs.
The Governor noted the shift as an important trend at the core of the central bank mandates of monetary and financial stability. Indeed, between 2017 and 2021, the proportion of cash payments in Denmark decreased from 23% to 12%. By contrast, digital payments rose to almost 90%.
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