Many people value cash very highly, and for legitimate reasons. It provides privacy, and its use does not necessarily depend on technical infrastructure. However, the share of cash is declining in many countries as cashless payments gain ground.
Most recently, the COVID-19 pandemic has given cashless payments an added boost – whether this shift in payment habits will be permanent or goes even further, remains to be seen. Nevertheless, the longterm trend is evident, and retail CBDC would allow the public to hold a digital claim on the central bank that is as secure as cash.