Martin Schlegel: Popular, but under pressure – cash in the digital age

Speech by Mr Martin Schlegel, Vice Chairman of the Governing Board of the Swiss National Bank, at the Forum for Financial Market Stability, Financial Market Authority (FMA) Liechtenstein, Vaduz, 29 November 2022.

Central bank speech  | 
29 November 2022

Ladies and gentlemen

Let me start by thanking you for the opportunity to speak to you here today at the presentation of your Financial Stability Report. The Swiss National Bank also publishes such a report every year – it is the key element in our macroprudential communication. I will be able to address financial stability issues in more detail in the panel discussion later.

In my remarks today, I will be focusing on another of the SNB's 'products', one which closely links Liechtenstein and Switzerland – cash. The Swiss franc has been the official currency – and thus legal tender – in Liechtenstein as well for almost 100 years now. It replaced the Austrian krone in 1924 owing to its stability and widespread acceptance in commerce.

In the recent past, payment habits have changed considerably. Digitalisation is also progressing rapidly in the area of payment transactions. Cash now has a number of strong competitors and is therefore being used less frequently for payments.

However, cash remains important and popular. I would like to explain why this is the case, and why it is important that cash continues to be widely accepted and easily accessible. Cash is a well-functioning system, but it is not to be taken for granted. The decline in use is placing it under pressure. I will set out why we need to take due care of the infrastructure in order to ensure freedom of choice in payments going forward.