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

[Abiky]

They don't need to reinvent the wheel

Today's money is already digital (apart from physical cash, apparently), which basically means they already have that "centralized database" in place and thus don't need to develop it from scratch. With that said, the Chinese central bank seems to have been developing their digital version of yuan from the ground up

Anyway, using someone else's design is not a good idea for a sovereign currency. Therefore, if a digital dollar is set to take off somewhere down the road, it will be their own design, that is to say, Fed's, not Ripple's or whoever else's. More or less, you can't outsource parts of your business which are vitally important for its long-term success

Good point. It makes sense to use a centralized database, instead of relying on an existent public blockchain network like XRP or Stellar. After all, governments want full control of the new monetary system. CBDCs will be considered as distributed ledgers, instead of Blockchains. That's largely because governments and central banks will have full control over the network's operations. My guess is that central banks will act as "miners", while governments will act as nodes of new digital fiat currencies (CBDCs). It'll be nothing more than a centralized database subject to a high-degree of surveillance in the mainstream world. In this scenario, physical bank branches will cease to exist. Banks will still be relevant in the new economy, but will provide their services entirely online.

Nonetheless, it seems to me that phasing out physical cash will take a lot longer than I've thought it would be. For instance, not every country has expressed their interest in launching a CBDC of their own. The United States is an good example of a country that's quite skeptical of launching a digital US Dollar even if China has already taken a step forward in this regard (with the development of a digital Yuan). After CBDCs become a reality, physical cash will still exist as some people use it for daily payments (especially the elderly). The process of phasing out physical cash will be a gradual one, as slowly but surely, CBDCs are introduced into every integral part of our society. Just my opinion

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[Sithara007]

No way it can happen in our lifetime

Unless some real shit hits the fan (and no, Covid-19 doesn't count as that) and we are using gold nuggets as money and clubs as weapons, the world will be where it is now as far as cash is concerned. Cash is extremely resilient, so even if 90% of all payments are cashless, the remaining 10% will be next to impossible to wipe out

Physical cash has been in existence for many centuries now and I don't think that it will be possible to completely replace it within the next 50 or 60 years. Even now, a large portion of the world's population doesn't have access to internet or smartphones. So obviously these people will be excluded from the digital transactions. Another thing is that there is a large fraction (especially the elderly) who are not comfortable in dealing with digital monetary transactions, even if they have access to internet/smartphone.

[vlast01]

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.

well its not easy to completely erase the existence of physical money/ fiat money, because it mostly depends on the demand of it on the society as long as there are demand for Fiat, Fiat money will remain exist. And also the government will take a lot of time to completely change the currency system from fiat to digital. 

[emmybd]

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.

I don't think that's going to happen so soon, as many parts of the world hasn't been digitalised yet. And many other parts of the world people don't have easy access to Computer and Internet. But, it is also true that the people of many developed countries will be using more and more digital technologies instead of cash in near future. But, in many other parts of the world the process will be very slow to phase out cash.

[Fortify]

I'm not sure that anyone should want banks to phase out physical currency entirely. If not for yourself, it is sometimes the only means that the least fortunate in society will have easy access to unless another solution comes along. If you are homeless and relying on the charity of strangers, having this possible source of income could mean the difference between living or starving. That being said, they must already be facing difficulties because many places in my country are now outright rejecting physical cash - I guess government support has heavily increased during this turbulent time caused by the pandemic. I'd say it is going to be at least 50 years before such cash is removed from circulation entirely.

[inoes]

the most important thing is infrastructure and regulation. for infrastructure 1-2 years it is sufficient for areas of the country that are already progressing (Europe, Japan, America). while for countries that are still in the developing stage it will take longer. talking about regulations it will not be easy for all countries to agree to them. do we have to force the FED to change cash with crypto? I don't think they will

[Gemini24]

Many would always love to use cryptocurrency as part of their daily activity like in buying their necessities because it's easy to use and it's hassle free transactions. But in my own opinion, phasing out physical cash will be impossible to happen, it's is not easy to implement even though how modern the technology is, there are so many things needs to consider and improve. They should focus on digitalization in every parts of the world first, many places has still poor internet connection.

[Sithara007]

the most important thing is infrastructure and regulation. for infrastructure 1-2 years it is sufficient for areas of the country that are already progressing (Europe, Japan, America). while for countries that are still in the developing stage it will take longer. talking about regulations it will not be easy for all countries to agree to them. do we have to force the FED to change cash with crypto? I don't think they will

Nope. Do you think that it's possible for developed nations such as Japan and the United States to outlaw physical cash all of a sudden? I don't think so. Even in these countries, there are a lot many people who don't know how to use digital cash. I'd say that full implementation of digital cash is at least one or two decades away.

[Sanitough]

the most important thing is infrastructure and regulation. for infrastructure 1-2 years it is sufficient for areas of the country that are already progressing (Europe, Japan, America). while for countries that are still in the developing stage it will take longer. talking about regulations it will not be easy for all countries to agree to them. do we have to force the FED to change cash with crypto? I don't think they will

Nope. Do you think that it's possible for developed nations such as Japan and the United States to outlaw physical cash all of a sudden? I don't think so. Even in these countries, there are a lot many people who don't know how to use digital cash. I'd say that full implementation of digital cash is at least one or two decades away.

Exactly, if the government are into big changes for digital cash adoption, it will not happen in an abrupt manner, slowly they will do it as adoption will take some time. When we speak of a country, not every part of it have the signal or internet connection that will be use for online transaction and I even think that they can't fully implement it as paper money is way more convenient than online money at least for majority of people.

[pilosopotasyo]

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.

The big question is will the government adopt CBDC, we must admit there are areas or sectors in our society that do not have an internet connection or had a very slow internet connection, here in our country there are rural areas where you have to go to the higher grounds or trees before you can get a signal, and ours is not an isolated case.

[Abiky]

Nope. Do you think that it's possible for developed nations such as Japan and the United States to outlaw physical cash all of a sudden? I don't think so. Even in these countries, there are a lot many people who don't know how to use digital cash. I'd say that full implementation of digital cash is at least one or two decades away.

Exactly. Phasing out physical cash is not as easy as it sounds. Banks are going to need to slowly introduce CBDCs in order to spur adoption in the mainstream world. After all, old people aren't fond with today's latest technologies. They've been accustomed to physical cash payments for a very long time. For widespread adoption of CBDCs, the old generation needs to "pass out" for the new generation to take over the world. This new generation includes young people who're easily attached to the latest trends in technology (meaning they'll quickly adopt digital payments). With a friendly environment towards CBDCs, governments and central banks will be able to phase out physical cash from the face of the Earth.

Nonetheless, the process of "phasing out" physical cash in its entirety might take decades. At least, we'll be able to enjoy privacy/anonymity via the use of physical cash while it lasts. After that, the only way to achieve financial privacy would be through crypto. It's no secret that CBDCs will give governments more control over people's finances. Full surveillance and manipulation will be key characteristics of a CBDC. And there may be nothing we can do to stop it. Just my thoughts

[Jet Cash]

Never - they wouldn't have created Sovereigns, Britannias and other gold coins and made them legal tender, if they didn't want to preserve the tax advantages.

[iamsheikhadil]

the most important thing is infrastructure and regulation. for infrastructure 1-2 years it is sufficient for areas of the country that are already progressing (Europe, Japan, America). while for countries that are still in the developing stage it will take longer. talking about regulations it will not be easy for all countries to agree to them. do we have to force the FED to change cash with crypto? I don't think they will

I agree to this. Along with that, the issue of corruption is really significant to a great extent here. For countries like India, the corruption index is really significant to the level that it influences everything that's implemented and that includes Bitcoin and crypto adaptation to a great extent as well. Hence, I think these countries will take very long time to actually get adopted to a cashless economy.

[inoes]

Is the transition of paper money to digital money based on the Covid outbreak because people have to be more careful in their interactions?
because in my opinion covid will soon disappear with the presence or absence of a vaccine. technologically, are all regions ready with the facilities? a bug? error? and the like that hinders smooth transactions?
so in my opinion fiat money is still reliable. so there's no need to rush

[Firefox07]

I don't think it will happen anytime soon. But if the government allow the use cryptocurrencies. It will be easier for banks to phase out physical cash.

[Zemomtum]

Will this ever happen? We have a lot of unbanked that are not aware of anything called digital currency. Apart from that, that means it will eliminate the central control which no Government will smile with. Even though it will ever slightly occur, it will not be universal.

[Natsuu]

Will this ever happen? We have a lot of unbanked that are not aware of anything called digital currency. Apart from that, that means it will eliminate the central control which no Government will smile with. Even though it will ever slightly occur, it will not be universal.

By the rate of our progress, I think this will happen but in late-late future as cryptocurrency is not that known, and if you would take the percentage of people knowing crypto, it would just likely range to >0.1% of the entire population. Yes, people talk about crypto in this forum but this number of people is very small compare to the whole average number of person living in this planet currently.

[NavI_027]

By the rate of our progress, I think this will happen but in late-late future as cryptocurrency is not that known, and if you would take the percentage of people knowing crypto, it would just likely range to >0.1% of the entire population. Yes, people talk about crypto in this forum but this number of people is very small compare to the whole average number of person living in this planet currently.

Hmm, I guess .1% or lower of world's total population is too small. I mean we now got more adoptions through the years that passed. Many people heard the about this new tech and tried it by themselves.Based on this website, it tells us that the total number of blockchain wallet existing as of Dec 3,2020 is 60,632,596. Yeah! I know that maybe some of them got foh le accounts and some of them aren't active anymore for certain reasons but the point is they still knew about it. As of 2019, we are already 7.7 billion in this planet which means that people who knew bitcoin alone are .007% not yet including the alt users, the family of that users who are a little bit aware what is crypto all about, the curious ones and even the random people walking on the street and see posters/signs about crypto.

My point is that we are now more than .1%. That's what I believe at least .

[plr]

the most important thing is infrastructure and regulation. for infrastructure 1-2 years it is sufficient for areas of the country that are already progressing (Europe, Japan, America). while for countries that are still in the developing stage it will take longer. talking about regulations it will not be easy for all countries to agree to them. do we have to force the FED to change cash with crypto? I don't think they will

Nope. Do you think that it's possible for developed nations such as Japan and the United States to outlaw physical cash all of a sudden? I don't think so. Even in these countries, there are a lot many people who don't know how to use digital cash. I'd say that full implementation of digital cash is at least one or two decades away.

I agree with two or three decades or the government can opt to create their own, I don't think they will adopt existing coin, they will prepare to adopt their own which they can regulate and fully control but awareness is the first key, the whole world should have a full awareness of how Cryptocurrency works before they support.

[Vishnu.Reang]

I agree with two or three decades or the government can opt to create their own, I don't think they will adopt existing coin, they will prepare to adopt their own which they can regulate and fully control but awareness is the first key, the whole world should have a full awareness of how Cryptocurrency works before they support.

Obviously none of the governments are going to adopt a decentralized cryptocurrency. At the most, they will adopt a central bank issued cryptocurrency (such as digital Yuan of China), which is centralized. If the governments adopts a decentralized currency, then it will be akin to giving away the control of financial system to the people. It will be good news for the citizens, but not for the authorities.