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Why cash is a public good and has a high social value

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Message Jeff Ledger

Despite prophecies to the contrary, demand for physical cash has risen during the Covid-19 pandemic. In technologically forward-leaning Japan, 10,000-yen notes have seen a sharp rise in their share of the overall currency in circulation, even as digital payments proliferate. This is one of many trends demonstrating that people around the world still believe in the public utility and social value of having and spending cash.

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In the last few decades, our notion of what money is and what it does have experienced disruption without historical precedent. The level of innovation has been startling, but experts suggest it is crucial that we do not lose sight of the qualities and utility that physical currency possesses--characteristics not easily replicated by digital pretenders.

The urge to build new things, to disrupt, to possibly break things--this pervasive mentality among technology innovators has the potential to miss vitally important properties of cash payment.

A recent decision from the court of Justice of the European Union notably determined that companies have an "obligation in principle to accept cash" under EU law, after a case of two German citizens came under its authority through referral from a local court.

Advocate General Giovanni Pitruzzella's opinion stated that the "social inclusion element of cash" and its significant role in the protection of "vulnerable people" must be safeguarded.

And indeed, cash has immense social value, over and above its utility as a vehicle of credit. It represents a public good by providing many functions for all of society, and being uncoupled from profit.

"Cash is profoundly democratic. It can be given by anyone, accepted by anyone, settled and cleared instantaneously," explains Bill Maurer, dean of the School of Social Sciences at UC Irvine.

As a medium, cash costs nothing to use. This makes it the most direct, equitable, and inclusive conduit through which the individual can engage with the wider economy.


"Cash enables anyone to trade easily, including vulnerable populations such as foreign nationals and communities in rural areas," says Steven Heilbron, CEO of the Connect Group. It also makes it easier for people with limited access to ATMs or the Internet to track spending and manage their budgets, Heilbron adds.

The universality and low-tech availability of cash is fundamental to a democratic and inclusive society. Cash operates as a mechanism for public good, ensuring competition among electronic payment methods that are themselves necessarily commercial in nature in a way that state-backed cash is not.

Cash is also the first stage of financial inclusion and, by extension, social inclusion. Removing cash as an option relegates financial exchange to the private sphere. This could clearly be risky, leading to situations in which decisions made for business reasons impact the rights to financial access of vulnerable people. In this way, the continued presence of cash in the economy is a public good that safeguards against abusive practices.

Dependability and psychological benefit

Another valuable quality cash holds over its electronic competitors is dependability.

"We need to think about it from a business continuity [perspective]. What if the network is down?" explained Jeffrey Goh, the head of Grablink, during an interview with Singaporean media.

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Hard working and very eager to help people I am involved in charities. Listen around you and try to make a difference... This is what I wanna do
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