Why central banks are speaking up for cash in times of COVID-19

Earlier in March, the World Health Organization declared that there was fake news going around about cash being a carrier of the virus. This rumor has been debunked since by medical experts and, now, more and more central banks are advising the public to continue using it as usual, and if anything, use it more. Here are the key messages from central banks regarding cash and coronavirus:

• Cash is safe to use (yes, even in times of coronavirus);
• Wash hands after handling cash (as always), but keep using cash;
• Keep using cash for financial and social inclusion purposes;
• Keep using cash for freedom- and privacy-defending purposes; and
• Keep using cash; it’s best for supporting local businesses.

The probability of picking up any virus from cash is actually very low compared with other surfaces. Both medical experts and central bank the world over have been emphasizing that "cash is safe to use" (even in times of corona). "To date, there is no evidence of the coronavirus having been spread via euro banknotes – and, if it had, the numbers of infection would be way higher," says Head of the Health Department in Frankfurt, Germany.

Canada

• From Bank of Canada (18 March 2020)

During this time of heightened public health measures intended to limit the transmission of COVID-19, some consumers and businesses are choosing not to use cash to limit potential exposure. Refusing cash could put an undue burden on people who depend on cash as a means of payment. The Bank strongly advocates that retailers continue to accept cash to ensure Canadians can have access to the goods and services they need.

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Finland

• From Bank of Finland blog (March 25th, 2020):

There are people who cannot move from home to work in a variety of services. The work of shops, pharmacies and kiosks is critical to all of us. Most Finns pay with a debit card and use self-checkouts smoothly, but cash is the preferred form of payment for about 10% of Finns. For these people, cash may be the only possible payment method and it is important that they get their purchase done. Cash can be used as usual during a coronary pandemic. However, the most important thing is careful hand hygiene, regardless of the payment method.

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Germany

• From Deutsche Bundesbank (March 17th, 2020):

Bundesbank board member Johannes Beermann has pointed out that the risk of being infected with the corona virus via cash is extremely low. "The likelihood of being infected with cash is less than with many other everyday objects," said Beermann in a press conference in the Bundesbank. "There is no particular risk of infection for citizens from banknotes and coins."

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Luxembourg

• From the Banque Centrale du Luxembourg (March 17th, 2020):

As with normal seasonal influenza respiratory droplets of a person infected with a virus could survive for a limited period on a banknote, like on any other object. The probability of contagion with a virus via a banknote is, however, very low in comparison with other surfaces (e.g. door handles, hand rails, light switches, shopping baskets, payment terminals). The basic protective measures against the new coronavirus should be applied as recommended by the World Health Organisation including washing your hands frequently.

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• From Luxembourg's Ministry of Finance (March 23rd, 2020):

In the current context of the health crisis linked to the Covid-19 coronavirus, the Ministry of Finance wishes to emphasize that to date there is no indication that cash is particularly likely to be a means of spreading the virus. In a communication dated March 17, 2020, the Central Bank of Luxembourg, referring to the German research institute Robert Koch, noted that "the transmission of the virus by banknotes has no particular significance". 

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New Zealand

• From Reserve Bank of New Zealand (March 19th, 2020)

Cash is just one of a number of frequently touched surfaces we encounter. The same is true for any other payment device whether it’s a card, phone or watch. This reinforces the need for good hand hygiene regardless of the way you pay or accept payment.

Retailers should use common-sense when it comes to cash. Businesses are not obliged to accept cash, but declining it may end up disadvantaging people who rely on its use. These people are more likely to be young, elderly, poor, disabled or financially excluded. Have respect and care for each other.

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South Africa

• From South African Reserve Bank (March 16th, 2020):

The SARB has neither withdrawn any banknotes or coins nor issued any instruction to hand in banknotes or coins that may be contaminated with the COVID-19 virus. The SARB will NOT, under any circumstances, send employees or representatives to collect cash from the public. If members of the public are approached by individuals purporting to be SARB employees or representatives, to hand in their cash, they should refuse and contact local police. There currently is no evidence that the COVID-19 virus is transmitted through the use of banknotes and coin.

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Sweden

• From the Sveriges Riksbank (March 26th, 2020):

There is nothing to indicate that there is a risk of being infected by the coronavirus via banknotes and coins. The coronavirus that causes COVID-19 is primarily spread from coughing and sneezing or via close contact with someone already infected.

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Further reading

• Bankrate: “Coronavirus and cash: Why consumers should be cautious, but not fearful of handling dollars” (Mar 27, 2020)
• Financial Times (Opinion): “Banknote virus fears won’t stop Germans hoarding cash” (Mar 25, 2020)
• G4S: “ESTA: NO RISK OF CONTAMINATION WITH COVID-19 ON BANKNOTES” (Mar 19, 2020)
• Bloomberg: “New Yorker Anxiety in Hamptons Leads to Hard Cash Demands” (March 15, 2020)
• New York Times: “A Bank in Midtown Is Cleaned Out of $100 Bills” (Mar 14, 2020)
• ATM Industry Association: “New Coronavirus Health Crisis – Separating Fact from Fiction” (Mar 12, 2020)
• MIT Technology Review: “No, coronavirus is not a good argument for quitting cash” (Mar 12, 2020)
• Wall Street Journal: “As Coronavirus Spreads, Should You Have More Cash—or Less?” (Mar 12, 2020)
• Reuters: “Banknotes carry no particular coronavirus risk: German disease expert” (Mar 11, 2020)
• MarketWatch: “World Health Organization: ‘We did NOT say that cash was transmitting coronavirus’” (Mar 9, 2020)
• Euronews: "Experts play down likelihood of banknotes spreading coronavirus” (Mar 6, 2020)

So, why is cash so important? Perhaps it has something to do with how it safeguards freedom, privacy, inclusion, security and costs, to name a few.