The Digitalisation of Money and Its Impact on Social Cohesion, Inclusion, and Public Trust in Institutions

Monetary infrastructures and payment systems play a key role in sustaining growth: not only do they allow for smooth exchanges, but they, more importantly, enable us to enter into socio-economic relations. The improvement of these infrastructures over the last century – particularly since the 1990s – has led to significant efficiency gains in which digitalized money has become the general means of payment for daily transactions, while material forms of money, such as cash, have been partly phased out. This process of digitalization is not without societal implications: it has generated new forms of inequality and social exclusion in addition to threatening institutional confidence and social trust.

Not having access to all of the available means of payment – for example, digital – can prevent someone from obtaining certain goods and services or from participating in certain socio-economic activities. As payment habits change, new standards are created, and those who are unable to comply with these new standards find themselves excluded. In a general sense, the digitalization of money could lead to a divergence between the "financially fluent", who will benefit from the proliferation of payment tools, and the “financially excluded”, who will find themselves even more on the margins. This could deepen already existing social fractures and ultimately raise questions about the role of policy interventions in safeguarding access to different forms of money and financial services. Beyond its relationship to individuals, money is fundamentally a social institution: it is a shared reference conveying a set of common values. Changes in money, whether technological or not, therefore impact the relationships between individuals and society at large. Today, technological evolutions have the potential not only to disrupt traditional financial actors but also to reduce the role of States themselves, bringing questions around social cohesion and citizenship to the forefront. It is not yet known if new forms of money can better address the needs of the general public and, in particular, of the most vulnerable, while also preserving the public good nature of money.