Cash and Crises

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.

After exceptional growth in banknote demand during the pandemic years, high inflation and growing interest rates have led to slower growth in 2022. But uncertainties continue to fuel precautionary demand for cash. Over 75% of currencies experienced positive growth of the value of cash in circulation.

A new paper analyses how different kinds of uncertainty impact cash demand. In uncertain times, cash always stabilizes the overall situation and leads to a more resilient economy.

A petition calls for banks to be required to ensure every community has access to cash and banking services and for physical retailers selling food and essential groceries to be required to accept cash.

The Cuban government recently restricted the use of cash in transactions, seeking to promote financial inclusion. Cuban infrastructure is ill-prepared for digital payments.

Cash is the only payment instrument that is largely independent of technical infrastructure. It is therefore essential, especially in crisis and emergency situations, to ensure that the cash cycle continues to operate, as electronic means of payment are unavailable or only available to a limited extent.