// Emma Brin-Vervat //

The Coronavirus health crisis has dramatically changed our relationship with cash. Indeed, before this crisis, the French were withdrawing an average of 500 million euros per day. Containment and e-commerce have changed the way we consume: the use of liquids has been halved. This decrease can be explained by several factors, in particular the increase in contactless payment as well as the desire to develop digital currency.

What about the future of cash in our increasingly dematerialized society?

Since the introduction of contactless payment (2012), cash seems to be an increasingly declining means of payment. Indeed, both immediate, practical and reliable, contactless shines. The health crisis accentuates this practice, raising the ceiling from 30 euros to 50 euros since May. Having become a real barrier, contactless is anchored in our payment habits. According to the Banque de France, contactless would have seen an increase of nearly 60% in France between the months of July 2019 and 2020.

In addition, digitization is a real threat hanging over the liquid. The rise of cryptocurrencies or the desire of central banks to develop digital currency, mean that digital is taking over.

However, the situation might seem paradoxical. If cash is no longer used as a means of payment per se, it becomes a means of savings. Indeed, fiat money is used less and circulates less in the economy, but the demand for banknotes is on the rise. The French seem to resort more and more to the use of real money to save; this method was already used during the previous crisis of 2008.

What are the advantages of eliminating cash?

It appears that eliminating cash would make it possible to fight against tax evasion by the simple fact of traceability. The institutions could thus have exclusive and exhaustive control of exchanges.

In addition, the elimination of cash could also help to fight against Mafia and terrorist networks. A removal of cash therefore has an advantage of control against trafficking in « dirty » money. The concept of traceability is therefore the main reason for the elimination of cash.

What are the risks?

Certain aspects nevertheless question this transition to digital. Indeed, if contactless payment is easy to use, for the merchant for example, this implies having the appropriate equipment, compatible with contactless. The network can be a drag in remote places. Thus, removing the liquid would have the consequence of marginalizing certain populations.

In addition, the elderly who do not have a bank account or people without a fixed address are bothered by this new measure.

Finally, as we have in a crisis, liquid money no longer becomes a currency of exchange but rather a currency of savings, of hoarding. Cash is a reassuring asset in times of economic or health crisis.

To conclude, with a more global vision, economists predict that cash will disappear by 2030. For example, Sweden, already very advanced in this transition, could wish to no longer use cash by 2030. Exchanges via cash does not represent more than 15% of the exchanges. It could be a generational problem: young people want even more dematerialized money, for a certain comfort of life.

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