Why Covid-19 Should Change the Way we See Cash

Covid-19 needed only a few weeks to changeThis is the action by which certain banknotes and/or coins are exchanged for the same amount in banknotes/coins of a different face value, or unit value. See Exchange. More the world fundamentally

Until recently, it was unthinkable that entire cities and even entire nations could be sealed off and business activities and social contacts reduced to an absolute minimum. What was impossible before Covid-19 is now the new norm: countries close their borders, cities are shut down, entire industries come to a complete halt, and people stay in their homes. Fortunately, with the exception of temporary bottlenecks, the supply of food to the population has so far been assured.The human tragedies and the economic damage are enormous, but fortunately there have not yet been any violent riots with injured or dead people. Although there is no end in sight to the state of emergency, it is to be hoped that the situation will soon be under control and normality will return.

What if Covid-19 were an internet virus?

Now imagine Covid-19 was a virus that infected the internet. Internet-based paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More solutions would no longer work: credit cards, debit cards, mobile payment, everything out of order! No moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More transactions would be possible anymore, except with cashMoney in physical form such as banknotes and coins. More.The world would be upside down within a few days. Systems that no longer work, violent riots including the looting of supermarkets and overwhelmed authorities would be the new agenda. A horror scenario? Of course, we are assured that this scenario cannot happen as the systems in place are robust, well protected and redundant. Just as we were assured in the run-up to the Covid-19 pandemic that all preparations had been made and all necessary facilities were in place to avert the disaster. This was true until the disaster actually struck.

What is to be done?

Disasters are unpredictable and can happen at any time. Therefore, it is essential that disaster preparedness is carried out in advance. To fail to plan, is to plan to fail, as the saying goes.

In the payment area, the following measures should be considered:

1. National central banksIn general, the expression refers to the central banks of different countries. More, commercial banks and possibly other entities (e.g. state transport companies, the post office, supermarket chains) should implement, and test, emergency solutions that provide the population with a reliable payment system in the event of a disaster. So far, cash is the only means of payment that functions reliably in crisis situations.

2. The population is advised to hold sufficient cash to bridge the gap for a while. Exactly the same as is advised for food. For example, Sweden’s Civil Contingencies Agency recommends that every household keep a stockpile of ‘cash in small denominations’ for use in emergencies. Fortunately, the internet has so far been spared a catastrophic virus. Let us hope that it remains so. But precautions should be taken, just in case it does not stay that way.