White Paper "Virtually Irreplaceable: Cash as Public Infrastructure"
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We may have arrived in the digital age, but people continue to live in the real world, with tangible objects all around them. Physical cash plays an important and enduring role in societies across the globe. Cash in circulation is growing, globally, at a rate of ca. 3% per year, and 80% of all payments worldwide continue to be cash transactions. Cash is, by default, an essential part of every stable financial and economic system.
The study was written by Dr. Ursula Dalinghaus and makes a case for how and why cash must be understood as a public good: “Virtually Irreplaceable: Cash as Public Infrastructure”. The white paper takes a close look at the role of cash in society and the specific characteristics making it a public good, referencing relevant studies, scholars, and field experiments. This paper demonstrates that cash is more than just a means of payment. It is a public good, part of modern life and vital for people’s everyday lives.
In the Global North, cash is the payment of choice for consumers who value cash for the freedom they associate with it.
Cash’s low-tech usability and capacity to function off the grid give it unparalleled resilience when digital payments are unexpectedly offline. Its status as legal tender ensures it is universally accepted, accessible to all, and is free to use for citizens, making it an important public good and public infrastructure. The anonymizing features of cash provide a degree of privacy that is increasingly important to consumers at a time when companies can track every cashless purchase and some state actors have begun to use digital platforms to monitor their citizens.
Cash ensures economic stability, and safeguards citizens’ rights to personal freedom and privacy. In light of the infrastructural, technological, and legal underpinnings of cash, this paper conceptualizes cash as a distributed public infrastructure – not a good in itself, but a system of relationships, technologies, and qualities that make the cash form unique. Cash payments are an indispensable complement to mobile, electronic, and digital payments.
“Digital payments depend upon this public infrastructure that cash makes possible, even as cashless proponents work to undermine and oppose cash […] Cash is part of a publicly accessible and guaranteed payment infrastructure that is vital to public life and economic stability.”
Studies by Cash Matters
This is the second study by Cash Matters, a movement by the International Currency Association, ICA. The first study, “Keeping Cash – Assessing the Arguments about Cash and Crime” was published in September 2017. The study “Virtually Irreplaceable: Cash as Public Infrastructure”, published on August 1st, 2019, makes a case for how and why cash is a public good.
Drawing on the accumulated expertise on cash and digital monetary technologies of the Institute for Money, Technology & Financial Inclusion (IMTFI) and the latest research across policy, industry, and academic sources, this paper highlights the particular qualities of cash – design features that no other method of payment offers – that have so far been overlooked in discussions about a future payments landscape.
Dr. Ursula Dalinghaus is a Visiting Professor of Anthropology at Ripon College and an affiliated scholar at the Institute for Money, Technology & Financial Inclusion (IMTFI), University of California, Irvine.