Mohamed El-Erian sees a world one day that eschews paper money in favor of digital payments that could include government-issued cryptocurrency.
“Is there a role for cryptocurrency in the future? Yes, but critically, officially sanctioned, that’s very different,” the chief economic advisor at Allianz told CNBC on Tuesday.
“Officially sanctioned” could take the form of a government-issued digital coin, like bitcoin for example, but that’s going to take “many years,” El-Erian said. “It’s not something that we’re going to see in the next three to five years … because people’s habits and people trusting in the new medium and change doesn’t happen overnight.”
But make no mistake, “we are moving away from cash,” said El-Erian, former CEO of Allianz-owned Pimco. “Go to Sweden and you’ll see how fast one can move away from cash.”
Earlier this month, CNBC looked into Sweden’s efforts to ditch paper money. Just 2 percent of the total value of transactions there consist of cash, and that’s expected to decline to less than 0.5 percent by 2020, according to research by Capgemini and BNP Paribas. Sweden is already considered the most cashless society in the world.
Sweden aside, “cash still plays a pretty important,” if diminishing, role around the world, El-Erian said.
Case in point, cash purchases in the U.S. as a total value of transactions stood at 9 percent in 2015, according to research conducted by the Federal Reserve.