Jonathan Ashworth, Charles Goodhart: Coronavirus panic fuels a surge in cash demand, in: VOX, CEPR Policy Portal, online in:https://voxeu.org/article/coronavirus-panic-fuels-surge-cash-demand, July 17, 2020.
Despite regular reports in the media over the past decade on the imminent death of cash amid rapid innovation in payment technologies, cash in circulation has actually been growing strongly in many countries. Perhaps unsurprisingly given coronavirus-related health concerns, there have recently been renewed calls to abandon cash and some observers have argued the virus will accelerate its demise. This column argues that the data so far indicate that currency in circulation has actually surged in a number of countries. While the economic shutdowns and increased use of online retailing have recently been diminishing cash’s traditional function as a medium of exchange, it seems that this has been more than offset by panic-driven hoarding of banknotes.