Speaking at the 2016 World Economic Forum in Davos, John Cryan, the CEO of Deutsche Bank, predicted “Cash I think in ten years time probably won’t (exist). There is no need for it, it is terribly inefficient and expensive”. Mr. Cryan also focused on the way in which cash supports the underground economy.
Surprisingly, 10 months later, Deutsche Bank Research, the macroeconomic analysis arm of the group, publish an interesting report entitled Cash, freedom and crime – Use and impact of cash in a world going digital.
The report observes that “demand for euro cash is on the rise”. Euro notes in circulation trebled in value between 2003 and 2016. But the report also stresses that “abolishing cash will not eliminate profit-driven crime”. Moreover, the report provides some striking illustrations that cash and crime are not connected.
- The share of cash in payments does not reflect the size of the shadow economy. Germany and Austria are cash-intensive economies with small shadow economies, while Sweden is a low-cash country with a relatively high shadow economy.
- High cash usage does not lead to high corruption levels. Countries such as Switzerland, Germany or Austria, where the share of cash payments is high all have a low level of perceived corruption.

- The relationship between cash usage and money laundering is also unclear. While both Europol and the Financial Action Task Force (FATF) observe that money laundering often involves cash at one stage of a process, it cannot be excluded that this is merely because authorities have become more efficient at spotting illegal flows of cash. Meanwhile, in Sweden where cash is declining, the number of detected money laundering cases has increased tenfold between 2008 and 2015.

- Cash is far more fraud-resistant than cards. In 2013, the value of counterfeit banknotes in the Eurozone amounted to €32 million whereas card fraud totalled €430 million.It is surprising that while banknote counterfeit data is available almost real-time, the last available data for card fraud is three years old.
