johannes beermann : cash of the future welcome remarks by dr johannes beermann, member of the executive board of the deutsche bundesbank, at the banknote & currency conference 2022, washington dc, 24 february 2022. * * * 1 introduction ladies and gentlemen, thank you for the invitation and kind introduction. it is a great pleasure for me to be here in washington, d. c. and to speak at the banknote and currency conference. having the opportunity to attend a conference like this again and see each other in person is another step towards normality – or rather : towards a new normality. “ the best way to predict the future is to create it. ” this timeless wisdom is sometimes attributed to the 16th president of the united states of america, abraham lincoln. i also see it as a call for us to start thinking about the cash of the future today. as the member of the bundesbank executive board responsible for cash, i arguably very much represent what many outside these four walls may refer to as the “ old world of payments ”. a world that some claim has little room for innovation and progress. however, the exciting contributions of the past conference days show the opposite : the latest developments in the field of cash production, the innovative methods presented in the fight against banknote counterfeiting and cybercrime, as well as the highly topical discussion on sustainability all speak for the fact that this supposedly “ old world of payment transactions ” is much more modern and promising than it might seem at first glance. the future of cash – this plays an important role in my speech. but when we talk about the future, we cannot disregard current developments. therefore, let us first take a look at the present. cash in circulation continues to increase in germany and throughout the euro area. the bundesbank has issued more than half of the euro banknotes currently in circulation by value. cash fulfils various economic functions. one of them is to store value. another is to make payments. according to our estimates, only about one in twenty banknotes issued by the bundesbank is used to make payments in germany. the use of cash as a means of payment is declining – this is true both internationally and in germany. nevertheless, the level of cash use is still high in many countries – and especially so in germany. there are fewer cash payments, but we are far from being cashless. so why has physical cash not sunk in the vast sea of digital means

research. let me first shed some light in the darkness and explain what this means. according to rolf kreibich, a german physicist and future researcher, future research is “ the scientific study of possible, probable and desirable future developments, the options for shaping them, and their roots in past and present ". this is not about forecasting, which is predicting the future precisely. forecasting tends to derive short - term conclusions from developments and often assumes that developments from the recent past will continue. in our case, however, it is about foresight. so it ’ s about keeping the big picture in mind. taking an overall look at societal trends and keeping in mind that there are multitudes of possible future paths – and long - term consequences associated with these different paths. because, and you will know this from your own lives : depending on the path you take, the landscapes to the left and right can differ greatly. and your perspective is sometimes quite different depending on your position. thinking through these different paths and applying a broad mix of methods is an important part of future research. it is about strategic foresight and the creation of different scenarios for possible futures. you can imagine the future as being like a funnel. the further the time horizon is in the future, the more possibilities can occur. these may not necessarily be desirable but they must be plausible. alternatively, to paraphrase kreibich : scenarios can only be “ indicators of a spectrum of possibilities ”. we therefore need to consider more than one scenario in order to be prepared. with the knowledge gained in the scenarios, we can then take measures and decisions to steer the future in the desired direction. the insight into possible cash futures is thus intended to provide orientation for our actions today. 5 practical examples this may all sound very abstract at first. let me give you some practical examples where these foresight techniques are already being used. one of the pioneers from the private sector is shell, one of the world ’ s largest mineral oil and natural gas companies. shell has been developing possible visions of the future since the early 1970s. the challenge here is to create plausible and challenging descriptions of the future economic environment. especially in times of uncertainty and upheaval, energy and environmental issues play an important role for society as a whole. in the past, shell was prepared for crises and changes because decision - makers were already confronted with such items in future scenarios. in the meantime, strategic foresight is also used in public and political