The UK cash share 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 POS and P2P payments.
Typically, currency has always had a physical form in cash, but recently the industry has seen a boom in the use of digital currencies. Digital currencies are becoming more popular in society, and this has a knock-on effect on physical currencies. This report examines how the rise in digital currencies affects physical banknotes and the subsequent effect this change in dynamic will have on security features. It analyses the technology used today and forecasts what the technology will look like in 2032. It discusses whether an interconnected system makes counterfeit notes harder to circulate, and how the industry will change in the next 10 years as digital and physical currencies compete for market share.
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What will you discover?
- A comparative analysis into both digital and physical currency and how their uses are changing
- The effect of Covid-19 on spending and the use of digital and physical payments across the globe
- Impact of Bitcoin and cryptocurrency on digital spending, with exploration into the regulatory process of these currencies – corruption within these models and security of the blockchain
- The impact of demographics on consumer spending using both digital and physical payments.
The Smithers methodology
- A changing regulatory landscape governing the use of digital currencies and physical cash shows cash payments becoming less prevalent, including in older generations. There appears to be a paradox of banknotes with cash rates having declined, yet the value of NIC is rising
- New regulations will see CBDCs provide a regulation framework for digital currencies and the supervisory and regulatory roles of central banks impacting the use of both physical and digital currencies.
This report is based on extensive primary and secondary research. Primary research consisted of targeted interviews with material suppliers, converters and experts drawn from key markets. This was supported by secondary research in the form of extensive literature analysis of published data, official government statistics, domestic and international trade organisation data, company websites, industry reports, trade press articles, presentations, and attendance at trade events.
About the author
Duncan Reid has 33 years’ experience in the currency sector with Portals and De La Rue. He led new product introduction projects from idea origination to market launch of banknote security features that are used in billions of paper banknotes worldwide. As a market analyst he was responsible for researching and analysing new banknotes and produced reports on the uptake and lifecycle of security features in banknotes globally. He has provided services to central banks including forensic analysis of counterfeit banknotes and training on banknote production.
Who should buy the report?
- Private-sector organisations active in the printing and distribution of cash
- Payment technology suppliers
- Central banks, state printers and mints
- Manufacturers of ATMs, cash handling and cash processing equipment
- Business strategy consultants and analysts
- Fintech companies