Whitaker’s Lecture: The Future of Money and Payments

Agustín Carstens, General Manager of the Bank for International Settlements, expressed his perspective on the future of money and payments. He claimed that there is currently no apparent necessity for a central bank digital currency (CBDC) and no proof that it would outperform existing technology.

30 July 2023 | 04:04

Agustín Carstens, a well-known economist from Mexico and the current General Manager of the Bank for International Settlements, shared his reflections on the future of money and payments during the ninth annual Whitaker Lecture. He argued that there is no clear demand for a central bank digital currency (CBDC) and no evidence that such a currency would serve us better than the currently available technology.

Honoring TK Whitaker

The annual lecture, which took place on Friday, March 22, 2019, at the headquarters of the Central Bank in Dockland, pays tribute to TK Whitaker, an influential economist and public servant who served as Governor of the Central Bank of Ireland from 1969 to 1976.

The Future of Money and Payments

In his lecture titled “The Future of Money and Payments,” Carstens shared his thoughts on the impact of technological innovations on the monetary system, particularly in relation to the introduction of CBDCs.

Carstens precisely described what a future monetary system with CBDCs could look like and the potential challenges it could pose to central banks as we increasingly enter the digital era.

What’s Really at the Center of the Debate?

Carstens emphasized, “The debate is not primarily about convenience and digitization; rather, it is about fundamental changes in both parts of the system that central banks oversee: money and payments.”

According to Carstens, the experiments conducted so far have not demonstrated that new technologies would perform better than the existing ones. There is no clear demand for a CBDC from society.

Cautio – Prudence as a Principle

Concluding his lecture on the implications of introducing CBDCs, Carstens recalled Whitaker’s words, stating that the role granted to central banks is “to be cautious, to be a warning light.”

“Central banks do not suppress innovation for no reason. But they also should not rush ahead, disregarding all the traffic conditions,” said Carstens.

We must ensure that innovations guide us in the right direction – for the economy, for businesses, for citizens, for society as a whole. This is what we are doing now.