Cash is king—now & forever

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Cash may not be making a comeback, but it’s here to stay.

In 2021, the Bank of Canada reported 80 per cent of Canadians had no plans to permanently trade their cash for cards in the next five years.

However, that doesn’t mean card transactions aren’t infringing on cash’s transactional volume. Between 2009 and 2017, the volume of cash transactions in Canada decreased by 21 per cent according to the Bank of Canada

That was pre-pandemic, before COVID-related public health measures began incentivizing many businesses to stop accepting cash altogether. So many small businesses were refusing cash in 2020 that the Bank of Canada issued a notice reminding Canadians cash poses no greater risk than “doorknobs, kitchen counters, and handrails.” 

In times of economic downturn, people still turn to cash as their safety net. Dollars kept in cash are better than a number in a bank account because they’re tangible.

For consumers and investors, cash is appealing because it’s synonymous with liquidity and its value is generally stable. Spending cash ensures you don’t overspend—there’s no “pay later” option.

Bloomberg reported last week alone “cash had inflows of $30.3 billion, while global equity funds saw outflows of $7.8 billion.” When people lose faith in the stock market, they revert to tried-and-true cash. 

In our era of online data collection, no one’s card information is safe. 

Over 42 per cent of Canadians reported having been the victim of at least one type of cyber security incident according to a Statistics Canada report from September 2020. 

It’s arguably easier to commit theft from the comfort of your home behind screen than it is to crack open a safe in a ski mask. Investment scams, notable cryptocurrency investments scams, saw losses exceeding $113 million in Canada in 2021. 

By Sept. 30, the Reserve Bank of India is mandating all banks, card networks, and merchants be prepared to handle tokenized card transactions due to the increased risk of fraud associated with the ever-growing number of digital payments.  

Keep it simple—stick with cash. It’s easy to use, readily available, and retains its value. 

When demoting the penny to the Pluto of Canadian currency in 2012, the Canadian mint learned it’s possible to remove cash from circulation. 

However, some Canadians depend on cash to supplement their income. People in rural areas, the elderly, and newcomers to Canada are particularly vulnerable to “cashless” sentiments. 

What the penny’s fate revealed is that some people will cling to cash as others move on. Whatever form it takes, money should be accessible and universal. 

Cash fulfills both these requirements, making it more than worthy of staying in Canadians’ pockets. 

Sophia is a fourth-year psychology student and one of The Journal’s Assistant News Editors

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