The Future of Banknotes in a Digital World to 2029

While the use of digital forms of contactless payments continue to grow rapidly in economies around the world, the global currency-in-circulation also continues to grow year-on-year and currently stands at an estimated $40 trillion.Over 550 billion banknotes from 180 recognised global currencies are currently in circulation. The production of new banknotes continues to grow globally, 3.7% CAGR during 2019–24. This comes despite the use of cash for point of sale (POS) payments declining globally for over a decade. Cash remains an important method for POS transactions in many countries, through preference or by necessity for the estimated 1.7 billion people who do not have access to banking facilities. Cash retains an advantage over other forms of payment in that it is convenient, reliable and anonymous. Periods of global uncertainty have invariably seen an increased demand for cash as people look to protect against unforeseen emergencies. Closures of local branches of banks and a shrinking network of ATMs is making access to cash more difficult in some countries. Some retailers are insisting on payment by digital methods only and governments are having to intervene to make the acceptance of cash payments a legal obligation.Key QuestionsIs the world heading towards a cashless society or will cash retain an important role in payment transactions well into the future?What technologies are being utilised by central banks to introduce new and more secure banknotes and combat the efforts of counterfeiters?How are developments in central bank digital currencies creating challenges that could impact the future of physical cash?This report is essential to: Organisations active in the printing and distribution of cash Payment technology suppliers Central banks, state printers and mintsAbout the author Keith Jacques has many years’ experience in carrying out market research projects on a wide range of topics including security print; backed up by over 40 years’ industry experience in a variety of roles in technical sales and marketing, and new business development.

Executive summary Introduction and methodologyIntroductionReport scopeReport objectiveMethodologyDefinitions List of abbreviationsKey drivers and trendsIntroductionThe functions of cash Advantages of cash paymentsDisadvantages of cash paymentsDigitalisation and digital currencyFinancial inclusionDemand for cash in times of crisisThe paradox of banknotesMeasuring the use of cashThe future of physical currencyTechnological advancements in banknotes and digital paymentsIntroductionBanknote technologies Levels of securitySecurity features DOVIDsiPrint process & security inksSecurity threadsWatermarkingTaggantsOthersDigitalisation and digital currencies Internet of ThingsIndustry 4.0Mobile payments/digital wallets QR codesM-PesaDigital currencies Cryptocurrencies Cryptocurrency advantagesCryptocurrency disadvantagesStablecoinsCentral bank digital currencies (CBDC)Distributed ledger technology BlockchainRegulations in the currency industryIntroductionRegulations on the access to cash and its acceptance for payments Europe European UnionUnited KingdomNorth America USAAsia ChinaRest of the WorldRegulations on digital currencies CBDCsCrypto assets Markets on Crypto-Assets Regulation (MiCA), European UnionUnited KingdomUSAAsiaAnti-money laundering and combating the finance of terrorism (AML/CFT) Cryptocurrency and AML/CFTThe future of cash cyclesOverviewPayment trends POS transactionse-CommerceCash supply chains Central banksCommercial banks The future of ATMsCash-in-transitCurrency-in-circulationDoes the cash cycle have a future?Geographic markets and forecasts by regionOverviewEurope The eurozone GermanyFranceSpainUnited KingdomScandinaviaNorth America USACanadaLatin America MexicoBrazilArgentinaThe BahamasJamaicaAsia China Hong KongIndiaAustraliaMiddle East and Africa