Cornell professor Prasad says cash will be obsolete in a decade

qz.com
7 min read
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After some 15 centuries, paper money may have outlived its usefulnss.
Central banks like the US Federal Reserve are printing more paper money than ever. But Cornell University economics professor Eswar Prasad, who published a new book on the future of money, thinks cash has outlived its usefulness.

Prasad's book, The Future of Money: How the Digital Revolution is Transforming Currencies and Finance, is a sweeping survey of fintech, crypto assets, and central bank digital currencies (CBDCs). Prasad, who has also written books about the Chinese renminbi and the US dollar, says the research that went into writing it has made him an optimist about our digital future.

The former head of the International Monetary Fund's China division thinks innovation will bring many more people into the formal financial system, making these services cheaper and available even to people with low incomes. Prasad acknowledges there are hazards, such as the loss of privacy when everything we buy has a digital footprint, and the potential for some to be disenfranchised as physical cash is replaced with digital payments. But, overall, he's betting the digital financial future will be better than the one we have known.

Quartz spoke to Prasad about cash, digital payments, and CBDCs. The conversation was edited and condensed for clarity.

Quartz: Your book is a wide survey of technology and changes in finance. How will these developments influence the world?

Prasad: These changes have enormous potential to democratize finance. That is, to make a broad range of financial products and services, including digital payments, accessible to the masses. This includes low-income people in developing countries who may have access to a mobile phone but have very low income levels. But it also includes the unbanked and the under-banked who constitute a fairly large number, even in an advanced economy such as the US.

Eswar Prasad Eswar Prasad.

We are beginning to see digital payments become the norm in a large number of countries, ranging from very advanced economies…
John Detrixhe
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