There’s no Substitute for Cash

calendar iconMar 14, 2022

Modern Diplomacy—a European platform that seeks to provide unbiased analysis of political and international issues—characterises cash as ‘a critical resource with no substitute’ in an article exploring the importance of preserving physical money in digital societies.

Privacy and the increasing number of ways in which data is used (and abused) is the first argument presented for keeping cash alongside cashless options. The author notes communications and transactions via computers and mobile devices are tracked, with the data mined ‘as a way to eke out that little bit more value from users’. While card transactions ‘already carry quantities of data that can be used to track your life’, cash is inherently private, needing no third-party involvement to function.

Social inclusion is the second issue highlighted, with cash offering it vital support. Unlike digital options, everyone can access banknotes and coins since they are ‘the only means of payment that is entirely public’. The author argues no other payment method protects the rights of all—especially a society’s most vulnerable people—to conduct payments, citing Advocate General Giovanni Pitruzzella of the Court of Justice of the European Union, who believes ‘it should generally be forbidden to prevent the use of cash for payments.’

In emergencies—from extreme scenarios affecting an entire nation to personal problems such as domestic abuse—cash provides a vital lifeline. The example given is the essentiality of physical money to a migrating refugee, facing daily uncertainties, but able to depend on cash to buy essentials wherever they may find themselves.

Should infrastructure fail, the author observes, cash will continue to be available where other payment options—requiring electricity and an internet connection—will be unusable. Outages happen on a weekly basis around the world, with one country or other being unable to use a particular cashless method due to problems with the provider or connectivity issues on the merchant side. While these are inconvenient, in scenarios where power and internet may be unavailable for days or even weeks, cash becomes vital in order for transactions to continue.

In conclusion, the author notes ‘cash cannot be hacked’. With cybercrime trending upward, and hacks becoming more frequent and pervasive, having cash on hand ensures a person can maintain financial independence should they lose access to online accounts, or find money has been drained from a digital wallet.

With all of these different dimensions in mind, the status of cash as a critical resource becomes self-evident. All the same, whether cash remains available to the public in the coming years might be determined largely by how hard people try in getting their voices heard.
"Modern Diplomacy
Last Updated: Mar 14, 2022