How long will it take banks to phase out physical cash completely?

[carter34]

How long will it take banks to phase out physical cash completely?

Bitcoin is digital cash. Bitcoin is the grantee that cash will never die. Very soon people will realise how important cash and digital cash are.

People already know how important that cash is, this is not in doubt. And I don't think cash will go away because the use of it is enormous in humanity. I expect that banks will adopt bitcoin to make payment faster since the countries are now going digital.

[finaleshot2016]

If we maximize the development of technology maybe soon but it will take a lot of years before it happens. Using smartphones is still not normalize in other countries and there are still people who lives in the traditional ways that use cash as payment. But as we foresee the future, a cashless society is really possible but it requires a lot before it'll be implemented.

The majority should also agree with using digital money and I doubt that all of them will agree since some don't have reliable sources of internet connection. Actually, there's a lot of apps now that can be used in an online transaction like online banking. So if they add more features to it, it's really possible and banks will surely phase out physical money if all users are into online banking.

[Abiky]

Of course not. They'd be losing business from people who only operate on a cash basis. There are plenty of people who get paid in cash or operate cash businesses, not just "the unbanked." It's an important market, at least in the US.

That's not to say there isn't a shift occurring though. In my opinion, the spread of germs via physical cash is a secondary concern. The big weakness the COVID-19 crisis revealed is the inability to quickly infuse cash into the economy via the banking system. It can take months to get on the unemployment rolls in times like these. 3 months after stimulus checks started getting issued, people are still waiting to receive them. There have been massive delays in processing of emergency small business loans.

That's why central banks are so interested all of a sudden. Their biggest fear is a deflationary spiral, an economic depression, and they know a CBDC would allow them to infuse cash where they need to exponentially faster than the current system of bureaucracy and banks. That holds a lot of value for them.

Exactly. Physical cash transactions are mostly "under the radar", leaving banks without the chance for profiting off fees from its users. Not to mention, some people use physical cash for tax evasion. With CBDCs in play, this is no longer possible. Things will be worse for everyday people, as a CBDC increases surveillance by central banks and governments alike. There will be no such thing as privacy once a new banking system living on Blockchain technology is established in the future.

As far as using CBDCs in the mainstream world, I think there's a long way to go as there are still people using physical cash for daily transactions. Most elder people are reluctant to change, even when technology improves our lives for the better. While young people will quickly adapt to the latest trends in technology, they're still the minority. Maybe a couple of decades from now (30 years, perhaps?), we'll be able to experience a fully-digital economy empowered by central banks' own Blockchain ledger. There's still room for growth, as Blockchain is an experimental technology. With governments becoming so interested in digital currencies of their own due to the impact of COVID-19 in the mainstream economy, it should not be long before the whole world becomes fully digitized. Just my thoughts

[Janation]

I think it would take some time, still a lot of years, IMO.

As there are countries that are technologically advanced, there are those that isn't. Some countries might apply this but there will always be a part of that country that will not adapt that so quickly. The same with countries that are having a hard time making their transactions online.

Also, there are those people that are not computer illiterate, I guess millenials will be the first ones to completely use digital transactions in the future.

[Paycoinzzz]

Now the real question is, how long will it take banks to start the transition from physical to digital cash (CBDC)? Do you think that physical cash will still be used right after governments adopt CBDCs in their entirety? Or will it take decades before every single person in the world stops transacting with physical cash, paving the way for a full-fledged cashless society? Your input will be greatly appreciated.

I do not think that they will give up cash, cash also tells the history of the country and shows the value of a country. So getting rid of cash quickly is a wrong decision and will affect a lot of poor people or those who don't know about technology. I don't really support this project because it causes a lot of inconvenience and I'm only used to using cash. Technology is good but not all fields should be technologyized.

[deisik]

Of course not. They'd be losing business from people who only operate on a cash basis. There are plenty of people who get paid in cash or operate cash businesses, not just "the unbanked." It's an important market, at least in the US.

That's not to say there isn't a shift occurring though. In my opinion, the spread of germs via physical cash is a secondary concern. The big weakness the COVID-19 crisis revealed is the inability to quickly infuse cash into the economy via the banking system. It can take months to get on the unemployment rolls in times like these. 3 months after stimulus checks started getting issued, people are still waiting to receive them. There have been massive delays in processing of emergency small business loans.

That's why central banks are so interested all of a sudden. Their biggest fear is a deflationary spiral, an economic depression, and they know a CBDC would allow them to infuse cash where they need to exponentially faster than the current system of bureaucracy and banks. That holds a lot of value for them.

Exactly. Physical cash transactions are mostly "under the radar", leaving banks without the chance for profiting off fees from its users. Not to mention, some people use physical cash for tax evasion. With CBDCs in play, this is no longer possible. Things will be worse for everyday people, as a CBDC increases surveillance by central banks and governments alike. There will be no such thing as privacy once a new banking system living on Blockchain technology is established in the future

To my knowledge, CBDCs will not be using blockchain

I agree that first proposals around 2015-2016 (e.g. by the Bank of England) mentioned blockchain, up to a point of actually suggesting to use it as their backbone value transfer system. CBDCs were in fact inspired by Bitcoin and its technology. However, from what we now know, the real implementations won't be based on blockchain. Seriously, what's in it for central bankers? In my opinion, they would do just fine with centralized solutions

[serjent05]

Now the real question is, how long will it take banks to start the transition from physical to digital cash (CBDC)? Do you think that physical cash will still be used right after governments adopt CBDCs in their entirety? Or will it take decades before every single person in the world stops transacting with physical cash, paving the way for a full-fledged cashless society? Your input will be greatly appreciated.

I do not think that they will give up cash, cash also tells the history of the country and shows the value of a country. So getting rid of cash quickly is a wrong decision and will affect a lot of poor people or those who don't know about technology. I don't really support this project because it causes a lot of inconvenience and I'm only used to using cash. Technology is good but not all fields should be technologyized.

Phasing out physical cash does not mean forgetting the history of its currency, and does not mean that the government will turn its back on its national currency.  As we know, cash not only appear in physical forms but also in Digital form,  In this thread, we are talking about physical cash and not about cash in its entirety.   Besides, it will be a step by step procedure until people see that physical cash became bothersome.

[Nhor1011]

As we enter the digital realm due to the effects of COVID-19, the process of central banks phasing out physical cash from existence might take place soon. Before the outbreak, we've been accustomed in using credit/debit cards and contactless payments greatly eliminating the need for physical cash. Now that we're in a "COVID Era", things have accelerated quite a bit. Banks and governments are in talks of adopting CBDCs which could completely eliminate the need to pay for things with physical cash.

Now the real question is, how long will it take banks to start the transition from physical to digital cash (CBDC)? Do you think that physical cash will still be used right after governments adopt CBDCs in their entirety? Or will it take decades before every single person in the world stops transacting with physical cash, paving the way for a full-fledged cashless society? Your input will be greatly appreciated.

Using a cashless payment is just temporary but i believed that after the covid 19 pandemic,using a physical cash will return to normal existence. It is easy for the banks to issue again a fiat money after the end of pandemic but the process of phasing out is difficult because all people are using it and holding it.

[Kelvinid]

I think it will take approximately 5-10 years. They will need 1-3 years for developing the project and the same time for implementing it.

Woow...
It looks like you are seeing the future. I don't know what is your basis for this but, to be honest, 5-10 years is not enough to completely dissolve physical and turn into digital transformation. In fact, many places are still out of the internet connection or if they have but they don't have any gadgets to use(third world countries). And how this cashless mode of payment will be fair and comfortable for everyone?

I don't disclose any possibility to make it happen but it takes decades, or until such time that national banks won't print paper money anymore. But for now, we are just considering this as another option cause I know, once this pandemic will be over people will turn back into using fiat money again.

[tippytoes]

I think it will take approximately 5-10 years. They will need 1-3 years for developing the project and the same time for implementing it.

Woow...
It looks like you are seeing the future. I don't know what is your basis for this but, to be honest, 5-10 years is not enough to completely dissolve physical and turn into digital transformation. In fact, many people are still don't know about crypto, don't even know how to use phones (esp for the oldies). And how this cashless mode of payment will be fair and comfortable for everyone?

I don't disclose any possibility to make it happen but it takes decades, or until such time that national banks won't print paper money anymore. But for now, we are just considering this as another option cause I know, once this pandemic will be over people will turn back into using fiat money again.

5-10 years? That is very short. Bitcoin or crypto has been here a decade and yet only small percentage of global population has the grasp of using it. Maybe in another 5-10 years time, the adoption will increase. But phasing out fiat money? that is very unlikely to happen. Just think of those people who are still unbanked up until today and those that have no connections with internet. So yes, it may take decades and decades before we will see high percentage of population that are into digital currency. But there will always be people who will stay unbanked, and not connected with digital community.

[Vishnu.Reang]

I don't have any issue, if the governments and the banks phase out physical cash in a voluntary manner. But what happening now is the opposite. They are forcing the citizens to go for online mode of payment, so that the anonymity can be breached. Physical cash remain as the most anonymous form of payment. None of the cryptocurrencies can match the anonymity being offered by physical cash. 

[South Park]

Such a thing will never happen in the US. Too many people will be against it. Look at the anger of many people because the "government" is forcing them to wear face masks. They believe that they're trying to take away their freedoms. They will look at a move such as facing cash out in a similar light.

It depends on the country, there are many first wold countries in which cash is barely used while there are countries with similar economic power in which people still prefer to use cash for their transactions, however as times passes and the older generations begin to pass away and begin to be replaced by other generations I think we are going to see an even bigger decrease in the amount of cash that is used but even then I do not think we are ever going to see cash to disappear completely.

[wozzek23]

I feel like there will be a moment when the technology is so advanced that people who were born before 1970's will not be alive so the adoption would be a lot easier and everyone will be adopting to whatever the newest technology is. At that moment we could start to see some crazy stuff that we can't even imagine right now.

People who are over 60 years old right now have hard time paying stuff from mobile, let alone get into crypto, so it is understandable that they would have hard time adopting to something new that would remove cash all together, yet there will be time when they are no longer with us which would open up a lot of doors. Hell even buying stuff online was something "dangerous" for a long time and now it is common as drinking it water so I am sure it will be fine.

[naikturun]

I'm not really sure but the financial system or progress of a country is very different so even if later it has been implemented in a country, then other countries may not necessarily be able to implement the policy, we know that digital use will indeed occur later, but it won't be possible everywhere all at once.

[barbara44]

Eventually. I do not mean right now, but eventually. Because the world has always constantly changed and I do not think finance is any different, that changed a lot as well. That is why I think even if not 100% clear of cash, we will eventually be pure digital, without ever spending cash anywhere except some weird people or very old people.

I would say 2050 is a good goal to pick, that would be people who were born in 1960's and 1970's mostly dead at that time (sure some people alive but very small percentage) so everything who was born after 80's would probably not feel the need to spend money in cash, almost all of them already spend it with either credit card or crypto right now, the number of people who was born after 1980's and still use cash as a standard option (not when they have to but they want to) must be close to people who own bitcoin.

[deisik]

I would say 2050 is a good goal to pick, that would be people who were born in 1960's and 1970's mostly dead at that time (sure some people alive but very small percentage)

That remains to be seen

I don't know where you are from, and the life expectancy in your country may well be substantially below the average lifespan in developed countries, after all. But since phasing out physical cash is mostly a task for advanced countries, with good healthcare and high living standards, people born in 1970's will be 75 years old by 2050 (again, on average). That's not much unless we succumb to something by far more lethal than today's Covid-19 in the coming years. If anything, Trump is 74 years old now, and it doesn't look like he is going to kick the bucket any time soon. So don't be surprised to see him still sticking around in 2050

[suzanne5223]

I'm not really sure but the financial system or progress of a country is very different so even if later it has been implemented in a country, then other countries may not necessarily be able to implement the policy, we know that digital use will indeed occur later, but it won't be possible everywhere all at once.

The Central bank digital currency was actually introduced to the government by IMF boss last year if i remember correctly and the last time i checked only few governments supported the idea and it not even possible for all the government that support the idea to implement digital currency at the same time. Besides, none of them talk about it until the pandemic issue happened.
@OP, fiat currency can not totally eradicate cause we need both fiat and digital currency to make things better.

[uneng]

Keep in mind internet adoption didn't reach everywhere yet, as its implementation is still too expensive in some places, consequently local communities don't have enough resources to pay for the installation (anthem) or to pay for a satellite internet monthly subscription.
And without internet, virtual transactions aren't possible, even if people were seeking for this. I think it is the main challenge to overcome physical transactions and to adopt a fully digital system, but I expect satellite internet investments are going to increase soon as it's the most practical source of signal as far as I know, what will make the service cheaper, covering the whole world with signal. When this happens we will be ready to phase out physical cash completely. Older people will have to adapt to it as they did before towards vehicles, electricity, television and more...

[danggoron]

--
Now the real question is, how long will it take banks to start the transition from physical to digital cash (CBDC)? Do you think that physical cash will still be used right after governments adopt CBDCs in their entirety? Or will it take decades before every single person in the world stops transacting with physical cash, paving the way for a full-fledged cashless society? Your input will be greatly appreciated.

IMO, this kind of change is not something that can take place quickly and instantly. This is like evolution, it takes quite a long time and adjustments to achieve ideal conditions. We know that the conditions of each human resource are different, some have used and followed technological developments, and some are still lagging behind and using conventional systems. So, this requires adjustments and a gradual process.

Keep in mind internet adoption didn't reach everywhere yet, as its implementation is still too expensive in some places, consequently local communities don't have enough resources to pay for the installation (anthem) or to pay for a satellite internet monthly subscription.

Supporting facilities and infrastructure are also very necessary. In some lagging regions, the internet network and other services have not been maximized. In the future, cash transactions will still be the first choice and online transactions are the best alternative. I am sure, one day when facilities and infrastructures and human resources are ready, online transactions will be the first choice.

[imstillthebest]

Keep in mind internet adoption didn't reach everywhere yet, as its implementation is still too expensive in some places, consequently local communities don't have enough resources to pay for the installation (anthem) or to pay for a satellite internet monthly subscription.
And without internet, virtual transactions aren't possible, even if people were seeking for this. I think it is the main challenge to overcome physical transactions and to adopt a fully digital system, but I expect satellite internet investments are going to increase soon as it's the most practical source of signal as far as I know, what will make the service cheaper, covering the whole world with signal. When this happens we will be ready to phase out physical cash completely. Older people will have to adapt to it as they did before towards vehicles, electricity, television and more...

internet is cheaper now 10 times  compare to what they are before  . gadgets to browse the internet are also cheaper , now we dont need the actual pc or laptop but we can use our phones  . its also not the job of the community to buy satelites for signals but its the job of the government to put that  . i dont think its not possible for all to convert to digital payments  but maybe its not the right time yet   .  i guess governments are still on the process to that idea because i think its not easy to just decide that we will permanently leave using physical money