Trade relations—and corresponding forms of payment—have evolved continuously over the course of human history, from barter to gold or silver coins, from paper money to plastic and other forms of cashless transactions. Transitions were not always easy and, at times, accompanied by episodes of disruptions, costly adjustments, even crises—but inherent benefits have outweighed risks, especially as the latter could be identified and addressed through appropriate policies.
It has thus been a welcome reflection of the National Bank of Tajikistan’s vision and sincerity to devote two days, together with high-caliber experts from Tajikistan and abroad, to ensure that households and businesses can take full advantage of the benefits of a cashless economy—while being cognizant of corresponding risks and challenges, ready to identify and address them, proactively and pre-emptively, within a sound financial framework and appropriate protections for all users.
Few—if any—among us present here today need convincing that a cashless economy is more efficient, more transparent, and more integrated than one based on paper money. The ability to pay by card, mobile phone, or other electronic devices reduces the risk of theft, impedes corruption and illegal transactions, dries up financial crime and money laundering. A cashless economy facilitates the management of financial resources, whether as a household, firm, or government, as information is readily available on all flows of income/revenues and expenditures.
Akin to efforts undertaken by central banks to add security features to banknotes to prevent counterfeiting, governments, including monetary authorities, will be required to respond to a new set of challenges. These include technological and infrastructure prerequisites, not least an urgently needed focus on the country’s digital agenda and the countrywide accessibility and affordability of internet services, at minimum in line with parallel developments in neighboring countries.
The transition towards a cashless economy cannot be successful without a clear strategy on securing the integrity of the entire system against threats from hacking or simple malfunction. And, equally importantly, this debate necessitates a serious reflection and debate on issues of inequality—a country’s poor and unbanked will face an even harder time in a cashless economy—and economic policy implications, not least those related to inherent incentives of stimulating growth through policies of negative interest rates that would reduce money’s purchasing power and detrimentally affect the confidence in a cashless architecture.
By tomorrow evening, it will have become clear that two days—even with a program as packed as this one—will not be enough to cover all aspects relevant for a successful transition. But it will have become clear that inherent benefits are worth every effort, investment, and policy adjustment. The World Bank Group stands ready to support Tajikistan in its endeavor to provide its households and firms with a most modern, efficient, transparent, and ultimately supportive financial sector.