Cash and Crises

A new paper analyzes the role of a well-functioning cash infrastructure for the stabilizing role of cash and the resilience of cash cycles. It highlights the critical role of the 4 A's - access, availability, acceptance, and affordability - as crucial building blocks of a robust cash infrastructure.

After exceptional growth during the Covid-19 pandemic, global cash demand was negatively impacted by the return of inflation in 2022. Early figures for 2024, indicate that demand is picking up. As central banks vigorously tackle inflation, the precautionary demand for banknotes in the increasingly uncertain world will likely grow. .

Elsewhere on the Web provides updates and links to articles related to cash, money and payments curated on the web.

Regional conflicts, ramping inflation, national debt crises, and the resurgence of monetary sovereignty all contribute to reshaping the world’s currencies.

Over the past few months, outages have brought down card payments in France (Wordline), Spain (Redsys), the U.K. (HSBC), Colombia (Bancaída), Uruguay (Fiserv) and now Australia (Wordline), to name but a few. Lloyds of London has warned that a major cyberattack on the global payments system could cost the world economy USD3.5 trillion. Can cash come to the rescue?

During the Israel-Hamas truce, a ton of NIS200 banknotes totaling $50 million was transported from the north to the south of Gaza to ease the economic plight of the population.

Most Palestinians remain unbanked despite the Palestinian Monetary Authority’s efforts to promote digital payments. Cash withdrawals are the biggest component of e-wallet transactions in the West Bank and Gaza.

In October, Hurricane Otis caused widespread devastation in the Pacific port of Acapulco. Mexican authorities and banks launched an effective plan to restore cash access.

Cash prevails in the Palestinian economy in the form of Israeli shekels. Cross-border payments are unstable. Cash transfers will have a limited impact without humanitarian supplies to help displaced Gazans.

On 6 October, POS terminals suffered an outage, leaving thousands of merchants unable to process card transactions. It is unclear whether this is due to a technical glitch or a cyber-attack.

Insurance company Lloyd's of London warns that a major cyberattack on the global payments system could cost USD3.5 trillion. Can cash come to the rescue?

In August, wildfires caused widespread devastation, electricity, and connectivity outages on the Hawaiian island of Maui. Cash was crucial in providing aid to survivors.