Ensuring everyone has equal economic access means keeping choice in payments is paramount. Recognising this, America’s Federal Reserve supports cash alongside digital alternatives. American Public Media website marketplace.org recently explored the advantages of this approach and how everyone can benefit from the option to use cash.
Firstly, banknotes and coins are available to everyone and can be used by anyone. By contrast, ‘all non-cash payments require having a bank account or a connection to a formal financial institution’. While many people are fortunate enough to have these, some 5.9 million U.S. households were unbanked as of 2021—around 4.5 percent across the nation—meaning they are shut out of the digital and mobile economy. For everyone else, there are likely to be occasions when they’re cut off from their accounts (e.g., due to a lack of cellphone signal or a card being cancelled) and cash will save them from the embarrassment and inconvenience of not being able to cover everyday expenses.
Secondly, cash helps keep both personal finances and wider economies resilient. Even in countries that strongly favour cashless payments, such as Sweden and the Netherlands, the advice from central banks and financial institutions is to keep some cash in a secure place for use in emergencies. For the hopefully rare occasions when electrical or internet infrastructures fail, banknotes and coins will allow people to continue transacting—paying for essential goods and services—until connectivity and cashless options are restored.
Thirdly, there are compelling reasons to choose cash over digital either on a daily basis, or for particular purchases. Bill Maurer, an anthropology professor at the University of California, Irvine, notes that cash offers considerable benefits over digital in terms of privacy: an increasingly rare commodity in today’s world.
