- CBDCs are gaining traction globally and could soon be a payment option in many countries
- CBDC adoption would allow governments easy access to the spending habits of its citizens, while cash would remain private and ‘off the chain’
- Cash users may find themselves stigmatized in the same way cryptocurrency users are now
Central Bank Digital Currencies (CBDCs) are suddenly all the rage. China, Korea, France, Japan, and a host of smaller countries are all experimenting to varying degrees with a sovereign stablecoin, with the vast majority of developments occurring in the past year. Widespread adoption of CBDCs would impact the global economy in many ways, but one less recognized impact could be on how cash is viewed in this new paradigm. A digital world could see cash users being scrutinized with the same eyes that cryptocurrency users are currently seen, accused of seeking privacy in their payments.
Cryptocurrency Users Looked Down On
The prevailing view of cryptocurrencies by those outside of the space is that they are used only by criminals or those with something to hide, despite the fact that almost all blockchains are externally accessible. This view is proving hard to shift, although Bitcoin has made inroads into debunking this myth via its rebranding into an internationally recognized hedge.
Cash on the other hand is not viewed in anything like the same way, despite the fact that it remains by far the favored payment method of criminal enterprises. This is because it is also a recognized payment method for almost the entire global populations, so doing anything to impinge its freedom of movement and transfer would be counterproductive.
CBDC Uptake Could Stigmatize Cash Users
In a world where the population has the chance to use cash or a CBDC however, 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 method of transaction, not to mention the most convenient, meaning that those using cash are doing so because they either prefer less convenient payment methods…or they have something to hide.
In a world 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 huge shift in sentiment for cash users, who may finally get a sense of what cryptocurrency users have been feeling for the past 11 years.