Covid-19: Future of cash and digital payments

Raphael Auer, Giulio Cornelli and Jon Frost of BIS in this note:

  • The Covid-19 pandemic has fanned public concerns that the coronavirus could be transmitted by cash.
  • Scientific evidence suggests that the probability of transmission via banknotes is low when compared with other frequently-touched objects, such as credit card terminals or PIN pads.
  • To bolster trust in cash, central banks are actively communicating, urging continued acceptance of cash and, in some instances, sterilising or quarantining banknotes. Some encourage contactless payments.
  • Looking ahead, developments could speed up the shift toward digital payments. This could open a divide in access to payments instruments, which could negatively impact unbanked and older consumers. The pandemic may amplify calls to defend the role of cash – but also calls for central bank digital currencies.

 

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