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Cash News: March 20-24

Categories : Cash and Crises, Cash does not require a technology infrastructure
March 29, 2022
Tags : Access to cash, Cash demand, Counterfeiting, Ukraine
Elsewhere on the Web provides weekly updates and links to articles related to cash and money, curated on the web. Last week, the focus was on how the Ukraine war triggered a run on cash in neighbouring countries.
Guillaume Lepecq

Chair, CashEssentials

This post is also available in: Spanish

The War in Ukraine and the Dash for Cash

Historian Adam Tooze asks on his blog, “When a nation is fighting for its life, with its cities are under bombardment and approaching a fifth or more of its population in flight, what is its currency worth?”

The situation is dramatic for refugees who emptied their bank accounts before fleeing and are being charged exorbitant rates to exchange their money, up to 90% higher than before the war, or face flat refusals. “Crossing the border from Ukraine into Poland at Zosin, there was a lot of help on offer — free food, free diapers,” one Ukrainian refugee told POLITICO. “But nobody [is] willing to exchange cash.”

Ukrainian payments cards are, in many cases, no longer working outside Ukraine. ATMs across Eastern Europe have been emptied, both by refugees and locals rushing to withdraw cash. The dash for cash has spread across neighbouring countries.

The Financial Times reports that cash in circulation rose 11% in Poland because of “unprecedented withdrawals” that caused “problems with the availability of cash in ATMs” in the first weeks after the war. The number of ATM withdrawals has doubled in Lithuania. Estonia, Latvia, Finland, Slovakia, and Hungary also reported higher demand for cash. Swedbank’s head of forecasting Andreas Wallstrom told the F.T. that cash withdrawals had reached the highest levels in three years.

E.U. member states, the European Commission, and the ECB are exploring how to support the Ukrainian central bank. One option is to create a facility to allow hryvnia holders to exchange a certain amount of their savings for euros. Still, the scheme would require E.U. guarantees from E.U. member states to cover potential losses on the hryvnia’s value. On March 18, the National Bank of Poland (NBP) and its Ukrainian counterpart signed an agreement to enable each adult refugee to exchange up to UAH 10,000. The exchange will be possible at the official exchange rate on March 25.

Access to Cash

Insider Intelligence stresses that providing cash and paper check access is still essential for banks. Cash recycling ATMs have demonstrated promise and could reduce the risk of ATMs running empty. “The number of cash recycling ATMs is projected to grow from about 1 million in 2021 to 1.2 million in 2026,” writes Tom Auchertonie.

In, Grace Pace, senior vice-president of digital banking at U.S. digital bank Quontic Bank explains how ATMs play an essential role in the digital space. Quontic operates a single ATM but provides its customers free access to over 90,000 cash machines in the U.S. through agreements with multiple ATM deployers. “As ATMs evolve, the more services they offer, the better for our customers, because then they’re able to do more at an in-person terminal instead of having to do as much online,” Pace said.

In the U.S., retail and financial associations are calling on the Treasury Department to help raise awareness about the need for increased coin circulation. In a letter to Treasury Secretary Janet Yellen, the Food Industry Association, the American Bankers Association, the National Grocers Association, and the Retail Industry Leaders Association asked the agency to “get coin moving,” the coin circulation campaign created by the U.S. Coin Task Force. “The consequences of a coin circulation slowdown fall hardest on consumers that cannot pay electronically. If retailers are not able to offer change for cash purchases, consumers who rely on cash will be vulnerable,” said the letter. While the shortage of coins eased a bit in late 2020 and early 2021, it has flared again, the groups said.

Counterfeit Stories

The Point reports that a Gambian man was arrested after allegedly attempting to convert counterfeit CFA notes into local currency. The exchange bureau attendant detected the fake notes.

The Times of India reports that five persons were arrested for printing counterfeit currency. They told police they started printing money to pay off their debts and to use in tantric rituals. The police found a colour printer and 61 counterfeit RS 500 notes.

The Daily Mail shows a Tiktok video warning against what appears to be a counterfeit Australian $50 note.

In the U.K., a 19-year old will appear before a judge after pleading guilty to holding £345 in counterfeit notes, even though he claims they were merely “collecting dust” in his bedroom, writes The Gazette Live.

The entire selection of articles from last week is available here.

This post is also available in: Spanish