'Cash doesn't crash'

business-standard.com:

In 2018, Sweden’s central bank released a paper, “If Crisis or War Comes”, encouraging citizens to hold physical cash to handle contingencies like war with Russia, or catastrophic weather. Since Sweden is the world’s most cashless nation, the advocacy was a surprise but the Riksbank was pointing out situations digital cash cannot handle.

In making a passionate case for retention of physical cash, Cloud Money deploys that argument of crisis/war, and adds others. Parts of the book read like an anarchist manifesto. But it is worth stepping past knee-jerk prejudices to consider the underlying rationality of some of the arguments.

The author is a white South African born just before Apartheid was dismantled. He enjoys the privilege of being part of the highly-digitised top decile of an economy that also has high cash-usage. He has an anthropology degree from Cambridge and a background as a derivatives trader, and in cryptocurrency, handling exotic instruments. So he brings training in behavioural sciences and experience in the digital economy to bear.

The drive towards cashlessness is supported by banks, credit card issuers, fintech service providers, giant digital businesses and central banks. Many governments have also regulated upper limits for cash transactions. Some economists also prefer cashlessness on theoretical grounds. Tools such as negative interest rates become easier to implement. Every advocate of cashlessness has something to gain. Cashless transactions generate huge data, which is most powerfully value-enhancing. Cashlessness also allows for cost-cutting, since ATMs, physical bank branches and printed notes are more expensive than digital cash. It promotes commerce — there’s ample evidence consumers spend