A cashless future.
Text: Michelle Isler
How would a society without coins and banknotes function? And what role does the government play in this? A thought experiment.
We put crisp banknotes in a greeting card for people’s birthdays, give children coins as pocket money, and deliver the takings from businesses to the nearest bank branch at the end of the working day. All of this would be different in a world without cash. In the thought experiment of a cashless society, we’d no longer toss small coins into fountains. Instead, we’d transfer pocket money to children’s smartwatches and only see ATMs in museums.
Aleksander Berentsen isn’t fazed by scenarios such as these. “They’re side issues,” he says. Berentsen is an economist who researches blockchain, cryptoassets and monetary policy. Rather than everyday questions like these, he’s more interested in the political framework that would apply in a cashless future. “With reliable institutions, cash is of secondary importance. With authoritarian and corrupt governments, however, cash becomes essential,” says Berentsen in relation to today’s banking system. “Without cash, assets are subject to state control. Anything in a bank account can be taken away at any time.”
The key factor is therefore the independence that cash allows: “Cash provides protection against abuses of state power.” The independence of society without notes and coins would initially depend on the design of what is known as “central bank digital currency” (CBDC).
Although this form of currency is under development in many countries, various questions remain unanswered. Critics fear that if payments leave a data trail, citizens will have nowhere to hide from Big Brother. There are, however, approaches that allow CBDC payment processes to be at least partially anonymized. “Depending on the design of the central bank digital currency, the state has both a complete monopoly on money and a perfect tool for surveillance. There is considerable risk of CBDC mutating into an instrument of absolute control,” fears Berentsen.
Options other than CBDC would provide a counterpoint to this. According to Berentsen, currency competition would be beneficial as it would offer protection against authoritarian states and poor monetary policy. “The example of South America shows that, when there is a loss of trust, people turn to foreign currencies.” In concrete terms, that would mean that you could pay in Switzerland with dollars, pesos or euros — as well as Swiss francs. Even with this kind of diversification, however, digital currencies fail to achieve the independence from the state that cash provides. Berentsen recalls the crisis in the early 2000s when Argentina “forcibly converted dollar holdings to pesos.”
With this in mind, the economist introduces a third component — cryptoassets — into the thought experiment: “With decentralized cryptocurrencies, our independence would be similar to the independence we enjoy with cash,” says Berentsen. “We diversify assets, so why not also payment methods? The diversification of payment methods is the logical continuation of the diversification of assets.”
A digital wallet for everyday use
Berentsen imagines a digital wallet containing various currencies and cryptoassets. You could pay for dinner in dollars, for bread with the CBDC, and for a new jacket in Bitcoin. This is another area where Berentsen sees an advantage to diversification: “Bitcoin and Ethereum are decentralized but volatile. Stablecoins such as USDT or USDC are stable but also closer to state control.”
“The wallet would become like a personal basket of currencies,” he explains. In our pocket or on our smartphone, we’d have different payment methods available depending on the level of trust in the state and the global political situation.
More articles in this issue of UNI NOVA (May 2026).