Measuring What Really Matters: Inside the Compound Cash Value Index

By Frane Maroevic, Director General, International Currency Association

Across governments, central banks, and financial institutions, debates about payment systems often revolve around cost, efficiency, and convenience. Yet these categories capture only a fraction of cash’s real value.

The Compound Cash Value Index—developed by an independent group of economists, behavioural scientists, and payment specialists—offers a structured way to understand cash not as a legacy tool, but as a multi-layered asset that supports national resilience, social cohesion, and individual autonomy.

The Index is grounded in a simple observation: cash delivers benefits across domains that digital systems cannot replicate. Some of these benefits have clear monetary expressions—such as seigniorage revenue or the avoided costs when digital platforms fail. Others lie in psychological or social fields: the ability to pay without surveillance, the sense of safety that comes from holding a trusted asset, or the stabilising effect cash has on people navigating economic pressure.

National security sits at the heart of the Index. Conflicts and crises continue to expose the fragility of systems dependent on uninterrupted energy, data networks, and private intermediaries. When electricity grids fail or communications collapse, a cash infrastructure keeps communities functioning and reduces the economic shock. Quantifying this effect demonstrates that the resilience cash provides is not theoretical; it delivers measurable economic protection.

The Index also incorporates privacy as a tangible value. Behavioural economists working on the project have assigned meaningful cost estimates to the erosion of personal privacy—legal expenses, mental health burdens linked to constant tracking, and the behavioural distortions that appear when every transaction becomes a data point. Cash, by shielding users from this exposure, generates a form of value that digital tools cannot offset.

Inclusion is treated not as a slogan but as an economic factor. The Index weighs the consumption power of groups excluded from digital finance, the risks of over-indebtedness that arise in frictionless credit environments, and the financial discipline that cash encourages through physical budgeting. These mechanisms contribute to broader economic health while preventing the deepening of inequality.

A further component is societal significance. Cash helps maintain continuity across generations, supports informal economies that contribute meaningfully to GDP, and strengthens financial literacy. In many communities, everyday transactions depend on cultural practices and relationships that become strained when payments migrate exclusively to digital environments governed by private rules and fees.

Taken together, the Compound Cash Value Index reframes cash not as a burden but as an asset with layered returns. Its findings offer policymakers a more complete understanding of what is at stake when cash access is weakened or when financial infrastructures are left entirely to digital platforms. The Index shows that the stability of a nation’s payment system depends on diversity, redundancy, and the preservation of tools that work under all conditions.

In an era shaped by geopolitical tension, climate disruption, and rising inequality, a payment option that delivers value across economic, social, and psychological dimensions is not optional. It is essential. The Value of Cash Project demonstrates that when crises hit, societies do not turn to the newest system—they turn to the one that never fails. That reliability, measured rigorously and communicated clearly, should guide the next generation of cash policy.