Four years ago, the former chief economist of the International Monetary Fund Kennis Middot; Kenneth Rogoff put forward a powerful reason for gradually eliminating banknotes.He pointed out in the Curse of Cash in his work that the use of a large number of banknotes (especially large -scale banknotes) provides convenience for tax evasion, and has promoted drug transactions, and even runs through the entire supply chain: 1999There is a study in Britain that they tested 500 banknotes in London and found that only four of them had no traces of cocaine.
In addition, the existence of cash also limits monetary policy.When investors can choose to fill 100 US dollars banknotes in the safe, it is difficult for central banks to implement negative interest rates.For some people at the time, this seemed to be a profound problem, but the Coronatte crisis had brought some countries to the policy agenda, although the United States had not yet done so.
Since Rogov published the above article, cash has been shrinking as a payment mechanism.For example, in Sweden, the disappearance of Crown banknotes seems to be close to it.The mobile payment system SWISH dominates the field of small face payment.As any person who wants to buy beer in Stockholm in the near future, if you have only a cash purse full of cash in your hand, this wine may not be able to drink.
The crisis crisis gives people another reason to stay away from banknotes.According to extensive reports, the virus can be spread through banknotes, causing merchants to post a notice that does not collect cash.In my village, even the frying fish and duty strips sell cars, and now they only accept contact -free card payment.In fact, this terrible story is only very small or no evidence support at all.The World Health Organization said that there is no evidence that banknotes will spread coronary virus.The virus can also survive the same time on plastic cards; while the University of Edinburgh infectious disease expert Christina Middot; Tate mdash; Christine TAIT-BURKARD also said that banknotes are not the media of the disease, unless anyone is someone.Sneeze against banknotes.
However, the damage has been caused. In the first month of the crisis, Britain's cash use decreased by more than 60%, and the transaction volume was halved.In a survey, nearly 75%of the respondents said that they expected to reduce the use of cash in the future.
This trend has spread in developed countries, further promoting the development of digital banks and non -bank payment system suppliers.Apple Pay (Apple Pay) and PayPal perform well.Although many people question whether the new fintech bank has not found a sustainable business model, they are still continuing to expand their user base.The Libra (Libra) of Facebook is ready to go, and its supporters are trying to persuade the regulatory agency. The model is safe and compliance with anti -money laundering regulations.
The further reduction of cash use has also injecting greater motivation to the central banks of various countries in digital currency.For centuries, citizens and enterprises have been able to directly request the central bank to pay for it through banknotes.If the cash disappears, isn't the central bank more reason to launch digital currency. Whether it is wholesale, retail or both?International Clearance Bank reports that several central banks are actively considering the introduction of this mechanism, but no one has been put into operation.National Bank of Sweden, which has been prepared for the launch of the electronic Crack, may become the first person to eat crabs.
So, are we going to say goodbye to banknotes now?Will even the dollar disappear?
The answer is not clear.First of all, although the number of transactions completed through cash transfer has indeed declined, even in the low -end range of transactions, the number of cash circulation in many countries has actually continued to rise.According to data from the International Clenging Bank, since the end of last year, the value of circulating currency in Italy and the United States has increased by 8%and 7%, respectively.Preventive cash holdings have increased.You know, it is not just drug dealers and tax evasion that values the value storage function of cash and attaches importance to privacy.Among the largest economies, only China's physical currency, the ratio of GDP (GDP) began to decline.
There are also signs that the cancellation of cash treatment services will cause political rebound.Bank of Canada requires retailers to continue to accept cash, worrying that the financial exclusion status caused by this will lead to those who cannot apply for bank accounts and cards cannot shop.New York City, San Francisco and New Jersey in the United States have banned retailers from rejection of cash.Even in Sweden, SWISH's promotion is not smooth sailing. A social activity organization named Kontantupproret (meaning banknotes) is currently launching a campaign to maintain the ability of poor consumers to use banknotes.In the UK, the government issued a cash acquisition channel review report, suggesting to mandate a large number of automatic cash withdrawals across the country, even if its utilization rate is rapidly declined.
In short, the advice to write banknotes may be too early because the demand for its services is still strong.It may be reasonable to provide digital services to non -bank institutions to non -banking institutions. Perhaps some reason is to avoid losses of coinage tax income, so that they will not feed facebooks (not government) in a Libra -led world.However, unless the central banks of various countries also want to enter the credit distribution business, they will want to avoid large -scale de -intermediaryization in the banking system.
Therefore, I believe that in the foreseeable future, we will live in a mixed economy payment system.Cash will continue to play a role, although this role will be smaller than in the past, and coexist with various cards and direct digital transfers.
(Author Howard Davies is the chairman of the Royal Bank of Scotland)
English Title: Will Covid-19 Kill Cash?
Copyright: Project Syndicate, 2020.
