Today, with a mobile penetration rate of 145%, internet transactions are becoming more prevalent. Last year, Malaysians spent 23% more on online shopping platforms compared to 2015. This is consistent with what is happening around the globe. The number and value of non-cash transactions have increased steadily in recent years. 1/4  BIS central bankers' speeches  Balance between paper and digital However, despite these observations, central banks around the globe expect cash to stay necessary and never go away. There are several reasons for this but ultimately they boil down to having a good mix of both. Think about the printed book. There are some things that an e-book simply cannot offer. You can’t turn down a corner, leaf through the pages, or crack a spine. However conversely, reading off a tablet or Kindle saves you the hassle of lugging around heavy books or lengthy academic articles – especially when you do not need to read them from cover to cover. As a policy maker, I would think that there are three elements, or the ‘3S’, that we should consider in determining an optimal balance of paper and digital, cash and cashless. Security The first consideration is security. Counterfeiting is as old as money itself. However, cash has become more secure in recent years. In Malaysia, the amount of counterfeits discovered reduced by 25% in the past year. The currency industry is continuing to make good progress in enhancing security features.
Encik Abdul Rasheed Ghaffour: Optimal balance of paper and digital, cash and cashless; and next page for physical currency Welcoming address by Mr Encik Abdul Rasheed Ghaffour, Deputy Governor of the Central Bank of Malaysia (Bank Negara Malaysia), at the Currency Conference 2017, Kuala Lumpur, 15 May 2017. * * * Mr Richard Haycock, Chairman, Currency Research, Fellow central bankers, Distinguished participants. A very good morning and a warm Selamat Datang to Malaysia. Paper lives on A lot has changed in the past 10 years. In May 2007, there was no such thing as a smartphone. Tablets did not exist, and the human race had not discovered the fast-expanding universe of mobile apps. Back then, we read the news by leafing through the pages of a large newspaper. We listened to music with CDs, and bought or rented DVDs to watch movies. Today, most of these are streamed through internet devices. When e-book sales increased by over 1,000% in the two years leading up to 2010, many questioned the future of the printed book. The bankruptcy of Borders in the United States the following year solidified these fears. Similarly, there has been much hype about the end of cash. This has been sparked by the rising use of e-payments and the recent proliferation of digital currencies in an increasingly virtual world. However, just as physical books continue to enjoy increasing sales, we have seen cash in circulation rise in many countries, quicker than their GDP growth for some.