The traditional currency war is a situation where countries seek competitive advantages over other countries by devaluating their own currency.
The new currency war relates (i) to the existing competition between international reserve currencies (mainly the US dollar and the euro) and (ii) to the coming competition, in an increasingly digital world, between public and private currencies (Central Bank digital currencies vs. privately issued crypto assets).
The relevance of cash, as a universally accessible Central Bank form of money, is being discussed.
While its use as a means of payment tends to decrease in many areas, we believe that its status of anchor of the monetary and financial system will remain, even though we are entering an era of digital money.
