[BASEL, SWITZERLAND] There are many different ways to pay for things and send money these days. However, a new study says that even with all of these options, the demand for cash “remains robust around the world,” and it’s even increasing.
The use of electronic payments has grown most rapidly since 2000. However, the Bank of International Settlements (BIS) found that the amount of cash in circulation among the world’s wealthier countries has increased by about 7 to 9 percent.
“Cash in circulation is, in fact, not dropping for most countries,” the study’s authors wrote.
Why?
The BIS study suggests that cash is increasingly being used in countries such as Japan like gold, as a store of value, not so much as a means of payment. When people are uncertain about the health of the economy or the stability of their government, they tend to keep lots of cash on hand.
Low inflation and interest rates also make it less costly to hold onto cash.
The use of cash is also essential to the black-market economy, when buyers and sellers want to avoid government inquiry or evade taxes.
It’s worth noting that the same advances in technology that have made electronic payments so popular have also made it easier to use cash. For example, ATMs are located everywhere.
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