Definition ∞ A digital cash surrogate functions as an electronic substitute for physical currency. This term typically describes digital assets designed to replicate the properties of physical cash, such as instant settlement, direct peer-to-peer transferability, and often a degree of transactional privacy. Unlike traditional digital payments that rely on intermediaries, a digital cash surrogate aims for a more direct and final transfer of value. Central bank digital currencies and certain stablecoins are often discussed in this context.
Context ∞ The concept of a digital cash surrogate gains prominence in discussions about the future of money, particularly with the rise of central bank digital currencies (CBDCs) and stablecoins. News often examines how these digital forms of value could alter payment systems, financial inclusion, and monetary policy, weighing their benefits against potential risks to financial stability and privacy.
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