Competition Between Digital and Physical Currencies in the Next 10 Years

The arrival of cryptocurrencies poses a fundamental challenge for cash cycle operators and banknote printers. For those firms that can successfully pivot, there are new market opportunities, including the challenge of how to integrate banknotes into a future digital payments economy.

A new study from Smithers, ‘The Future of Physical vs. Digital Currency: Banknotes in a Digital World to 2032’, details measures to gauge the use of cash and the proportion of physical versus digital cash.

Leading markets

Digital payments are becoming more popular in society. As a result, according to the report, the cash share in the UK, for example, reduced from 21% in 2016 to 12% in 2020. The share of adults making or receiving digital payments in developing economies grew from 35% in 2014 to 57% in 2021. In 2019, cash accounted for 48% of point of sale and person to person payments.