Central Bank Digital Currencies (CBDCs) suddenly became not just a fashion or fad but ultimately the trend. China, Korea, France, Japan, and a multitude of smaller countries are all experimenting to varying degrees with a sovereign stablecoin, with the vast majority of developments occurring in the past year.
Universal acceptance of CBDCs would influence the global economy in a lot of ways, but one less acknowledged impact could be how cash is considered in this new model. A digital world could see cash users scrutinized with the same eyes that cryptocurrency users are currently seen, accused of seeking privacy in their payments.
Cryptocurrency Users Looked Down On
The general view of cryptocurrencies by those outside of the space is that they are used only by criminals or those with something to hide, even though almost all blockchains are externally accessible. This view is proving hard to shift, although Bitcoin has made inroads debunking this myth via its rebranding into an internationally recognized hedge.
On the flip side, cash is not regarded in anything like the same way, even though it remains by far the favored payment method of criminal enterprises. This is because it is also a recognized payment method for almost all global populations, so doing anything to impinge its freedom of movement and transfer would be counterproductive.
CBDC Consumption Could Discredit Cash Users
Globally where the population can use cash or a CBDC, cash users could soon find themselves being stigmatized in the same way that cryptocurrency users currently are. CBDCs will be the more open and honest transaction method, not to mention the most convenient, meaning that those using cash are doing so because they either prefer less suitable payment methods…or have something to hide.
In our planet where digital currencies are preferred, cash could end up being seen as the more secretive payment method over a CBDC, used only by those who want to keep their transactions off the books. This would represent a massive shift in sentiment for cash users, who may finally get a sense of what cryptocurrency users have been feeling for the past 11 years.