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US Congress explores the implications of the decline of cash usage

Categories : Cash is a public good, Cash is available to all users, Cash is the first step of financial inclusion
July 19, 2019
Published in : Access to cash, Cash usage, Financial inclusion, Payment instruments, Regulators, US
The US Congress has published a comprehensive analysis of the state of cash in the US and explores the implications of the decline of cash usage for payments.
Guillaume Lepecq

Currency in circulation is growing in the US. “The amount of currency in circulation has increased steadily for at least  the past 20 years” says the report. As of December 2018, there were over 43 billion notes worth over $1.67 trillion in circulation.

However, some evidence suggests that cash is used less frequently for payments. According to the Fed’s 2018 Findings from the Diary of Consumer Payments Choice , cash has seen its share in retail payments decline from 33% in 2015 to 30% in 2017.

The report identifies both positive and negative implications of the decline in transactional demand for cash.

On the positive side, it cites :

On the negative side, the counter-arguments are :

The author concludes “Cash has a number of advantageous features that has made it a simple and robust throughout most of human history. It is difficult to imagine conditions under which would be replaced entirely, and disappear from the economy, at least in the near future.”

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