An unprecedented public debate
According to the report, the Covid-19 pandemic has generated an unprecedented public debate on the risk of transmission of the virus by banknotes and coins. The number of internet searches associated with cash and Covid are skyrocketing as illustrated by the chart below.
Promoting Trust in Cash
A number of central banks – Austria, Canada, Finland, Germany, Luxembourg, New Zealand, Sweden – have actively communicated to promote trust and acceptance of cash and emphasise that there is no evidence they play a role in spreading coronavirus. Several central banks – Austria, Germany, Morocco, New Zealand – have emphasised that the supply of cash is secure during the crisis. Some central banks – China, Hungary, Kuwait, South Korea, Russia, the US – have taken measures to sterilise or quarantine banknotes. Some central are promoting contactless payments.
The key take-aways from the report are:
Strengthening the role of cash
The authors also stress that “If cash is not generally accepted as a means of payment, this could open a ‘payments divide’ between those with access to digital payments and those without. This in turn could have an especially severe impact on unbanked and older consumers. In London, one reporter (Hearing (2020)) has already noted the difficulties of paying with cash, and the consequences for the 1.3 million unbanked consumers in the United Kingdom. In many of the emerging market and developing economies where authorities have recently called for greater use of digital payments, access to such alternatives is far from universal. This could remain an important debate going forward, potentially asking for a strengthening of the role of cash.”