Dr. Eswar Prasad

For businesses operating domestically as well, I think we are going to see significant improvements in payment efficiency.

Right now, you know, in the U.S., consumers still use credit cards, even checks and currency a fair bit.

And again, all of these payment systems are either expensive or have their own inefficiencies.

Now, the US Federal Reserve has set up a program called FedNow, which is already substantially increasing business to business, consumer to consumer and consumer to business payment efficiencies, but also improving the back end of payment processing.

know where commercial banks go and settle transactions between themselves so all of this can happen much more quickly can happen 24 7 365 days a year so for businesses it's going to get a lot easier there is certainly going to be a transition phase when you know those of us who are still addicted to our credit cards because we get cash back because we get points and so on

might hang on to them.

But the reality is that we're going to move to much more efficient digital payments, which is going to be great for consumers and for businesses, including lower-end retail businesses.

Certainly, we're going to have more efficient transactions.

I think most transactions will take a digital form.

And for those of us who still like using cash, it's going to be a problem because I think almost organically, the use of cash is going to decline.

Interestingly, there are some countries like the US, Japan, Switzerland, all rich countries where a lot of people still seem to use a lot of cash, but the future can be seen in countries like China and India and Sweden that we talked about earlier.

where practically nobody uses cash anymore.

So we're going to eventually have to give up using cash.

And of course, there are many states in the US that are trying to put a barriers to this.

They want to allow or want to require businesses to still accept cash, but I think the writing is clear on the wall.

So it's going to be much more efficient, but it comes with the risks that you mentioned earlier, Dan,

We're going to be moving into a world where digital payments are going to be much cheaper, more efficient, which at some level is great for consumers, businesses and the government.

But it is going to be a world where none of our transactions can be counted on to give us any privacy anymore.

There are going to be some quite significant implications.

If you think about most retail investors and their portfolios, you don't need very sophisticated techniques to manage them.