Within any country, the demand for central bank digital currency (CBDC) will be influenced by trends in the level of cash use. While having access to digital currency is more convenient than having to travel to an automated teller machine, this only makes digital currency as convenient as a bank debit card — not better. Demand for digital currency will thus be weak in countries where the adoption of cash substitutes (eg cards, electronic money, mobile phone payments) has suppressed demand for cash. By contrast, where cash use is high due to a lack of substitutes, demand for digital currency should be stronger. Building on the observation that demand for CBDC is tied to the current level of cash use, this paper uses four measures to assess trends in the demand for cash in 11 countries. A tentative forecast of cash use is also made. After showing that declining cash use is largely associated with demographic change, the study ties the level of cash use to the likely demand for CBDC in different countries. In this process, it is suggested that one measure of cash use is more useful than the others.
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