DIGITALIZATION IS PUSHING FORWARD

Cash will not always rule the world. Applications and cards are gaining popularity and central banks are considering whether their countries actually need a digital currency, and if yes, how to create one.

The usual way to pay for purchases is rapidly changing. Visa and MasterCard strengthen their positions in many parts of the world. At the same time, companies such as Apple, Chinese Ant Financial, Swedish Swish and Kenyan M-pesa are conquering the market through mobile applications. Facebook also had some ambitious plans, but faced governmental restrictions.

Technical innovations are pushing out cash payments, and the governments start to wonder how to replace obsolete banknotes and coins. According to the data provided by the Bank for International Settlements (BIS), dozens of countries are studying, testing or implementing digital currencies in central banks.

But the issue persists: there is a significant difference between physical money and electronic wallets. Banknotes and coins are issued by the central bank, the basis of the country’s financial system, while digital money depends on the stability of commercial structures and as a result is more vulnerable.