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Cash, Long a Refuge in Uncertain Times, Now Under Suspicion

Associated Press

   BEIRUT - In troubled times, people have been known to hoard currency at
   home -- a financial security blanket against deep uncertainty. But in
   this crisis, things are different. This time cash itself, passed from
   hand to hand across neighborhoods, cities and societies just like the
   coronavirus, is a source of suspicion rather than reassurance.
   No longer a thing to be shoved mindlessly into a pocket, tucked into a
   worn wallet or thrown casually on a kitchen counter, money's status has
   changed during the virus era -- perhaps irrevocably. The pandemic has
   also reawakened debate about the continued viability of what has been
   the physical lifeblood of global economies: paper money and coins.
   From the supermarkets of the United States and Japan to the shantytowns
   of Africa to the gas stations of Tehran, a growing number of businesses
   and individuals worldwide have stopped using banknotes in fear that
   physical currency, handled by tens of thousands of people over their
   useful life, could be a vector for the spreading coronavirus.
   Public officials and health experts have said that the risk of
   transferring the virus from person to person through the use of money
   is minimal. That hasn't stopped businesses from refusing to accept
   currency, and some countries from urging citizens to stop using
   banknotes altogether.
   In the midst of the coronavirus era, a thousand calculations are made
   before cash is handled -- mostly with gloved hands. Some leave the
   money laid out on surfaces for days, for the virus to die. Others
   disinfect banknotes with spray. Some even microwave them in the belief
   it kills the virus. In China, banks are now required to sterilize cash
   with ultraviolet light or heat, then store notes for at least a week
   before they are given to customers.
   "In many areas, cash was already beginning to disappear due the
   increased risk of robbery, the ease of internet ordering, and the
   ubiquity of cell phones," says Zachary Cohle, an assistant professor at
   the department of economics at Quinnipiac University in Connecticut.
   "Cash," Cohle says, "now carries an extra stigma."
   But is ditching cash altogether even feasible?
   Sweden, Finland, Norway, Canada and others have slowly phased out cash
   to the point where using it in large amounts seems suspicious. The
   United Kingdom and Australia are among countries expected to become
   cashless societies. And in China, use of cash by consumers has plunged
   as smartphone-based payment services rose in popularity over the past
   decade.
   But for much of the rest of the world, letting go of cash is difficult
   if not impossible.
   Humans have a centuries-old emotional relationship with physical money
   that is difficult to erase.
   "Currency represents value that we can hold in our hands. Cash provides
   a way for us to translate a day's work into something tangible and
   easily traded," Cohle says. "We may not know what goods we will need in
   the future. However, holding money allows for us to feel as though we
   can buy whatever goods we will need."
   "Cash ist Fesch" is a common saying in Austria and southern Germany.
   The phrase, which literally means cash is beautiful, reflects both
   countries' attachment to cash -- and not just among the older
   generation or those who worry about the loss of privacy that comes with
   cashless payments, but also among some younger people who see it as a
   status symbol.
   "I always pay with cash -- as a matter of principle!" Ingel Strobl, a
   76-year-old pensioner, says while shopping at a bakery in central
   Vienna. "I know they want to abolish cash. But I don't want that we
   lose our right to our own money. You know what I mean anyway! I stick
   to cash -- corona or not."'
   Since the virus outbreak, however, shops that have remained open, like
   grocery stores, have posted signs encouraging people to pay with cards.
   Many are: According to Germany's central bank, the Bundesbank, 43% of
   people have changed their payment behavior in the past few weeks; now,
   a large percentage are likely to make contactless payments with a card.
   Japan, for its sophisticated reputation, is also a solid believer in
   cash, which makes up for 53% of a household's assets, according to the
   Bank of Japan. The belief in "cash is king" reigns, though the country
   has had zero interest rates for two decades, far longer than the rest
   of the developed world.
   But the threat of the coronavirus could be the impetus the nation
   needed to move toward going cashless, said Hiroki Maruyama, who heads
   the Fintech Association of Japan, a nonprofit that supports innovation
   in financial services.
   "The culture," he says, "is slowly changing."
   Cash in Crisis
   "Cash combined with courage in a crisis is priceless," billionaire
   investor Warren Buffett says.
   In crisis-hit countries and parts of the world gripped by conflict or
   inflation, cash is still carried in thick wads for simple shopping
   expeditions.
   In Lebanon, as the economic situation deteriorated late last year and
   the fear of banks collapsing mounted, many people began saving cash in
   their homes. The sale of home safes surged. An estimated $3 billion was
   withdrawn and stashed at home, according to the governor of the
   country's Central Bank.
   As banks imposed capital controls, trips to the bank to withdraw
   foreign currency -- followed by a trip to one of the ubiquitous
   exchange shops to change money on the black market -- became the norm
   for many Lebanese.
   "All I do is handle cash all day," said one money changer in Beirut,
   who insisted on being identified by his first name, Ihsan. He said he
   feared unwanted attention from authorities.
   "I wear gloves. But honestly? Corona is the last thing on people's
   minds right now," Ihsan said. "All they're thinking about is how to
   handle this crisis and get money to live."
   In Iran, one of the world's worst coronavirus hotspots, there are no
   international bank cards, like Visa or Mastercard, because of U.S.
   sanctions. Many were surprised at the new banners that appeared at some
   gas stations in Tehran: "Service is only for those who will pay by
   debit cards."
   In Venezuela, it is common to see bolivars littering the streets
   because the local currency has lost its value.
   "The truth is that I haven't had any bolivars in my wallet for a long
   time," said Fátima Figueras, a 32-year-old office worker, waiting in
   line to enter a Caracas pharmacy. "What worries me most is having to
   hand my debit card to a cashier who touches it," said Figueras, wearing
   a facemask against the coronavirus.
   Cash still rules in West and Central Africa even with the growth in
   regional banking options and mobile money service providers. Monthly
   banking account fees are prohibitive for many, and the self-employed
   often keep their savings at home in hard currency. ATM machines often
   don't work.
   Dorothy Harpool, director of student and community initiatives and
   lecturer at Wichita State University's W. Frank Barton School of
   Business, predicted the pandemic would lead some consumers to rethink
   their use of cash. But going completely cashless, she says, is a long
   way off.
   "Until everyone and every country has reliable access to the internet,
   I do not believe the pandemic will singularly change past practices,"
   Harpool said. In particular, cash transactions are also likely to
   remain for businesses operating under the radar of government and other
   regulatory bodies.
   Ihsan, the Beirut money changer, said there are certain things you just
   can't do without cash -- particularly in a dysfunctional and developing
   nation.
   "Like how else can you bribe a government employee to get your business
   done? With a credit card?"