Despite public concern that Covid-19 is being transmitted by cash, scientific evidence suggests the risk is low compared with other frequently touched objects, including PIN pads, says a bulletin from the Bank for International Settlements (BIS).
Early on in the coronavirus crisis, reports emerged that the World Health Organisation was advising consumers to avoid handling bank notes and instead switch to contactless payments.Download the document now 1 mb (Chrome HTML Document)
The WHO later said that it was not offering any formal warnings on the issue but there has still been a flurry of moves to discourage cash usage, with countries raising their contactless payments limits and some providers - such as Kenya's M-Pesa - slashing transaction fees.
In the UK, cash usage halved in just a few days, although this was partly due to the Government's imposition of a nationwide lock-down on freedom of movement.
Now, some fear that concerns over cash's safety could prove problematic. BIS says that the scientific evidence shows that the risk of Covid-19 transmission via cash is low compared to, for example, 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. In Germany, the Bundesbank is advising people that the risk of transmission through notes is minimal and the Bank of Canada is asking retailers to not go cash-free.
The South African Reserve Bank had to warn the public that it is not withdrawing banknotes and coin because of Covid-19, as criminals carrying fake IDs went house-to-house to collect 'infected' notes.
Irrespective of whether concerns about cash are justified or not, BIS says the crisis could change payment behaviour. This could negatively impact the unbanked and older people and require central banks to defend cash.
However, the pandemic could also help spur the development of central bank digital currencies, says BIS, with Covid-19 "highlighting the value of having access to diverse means of payments, and the need for any means of payments to be resilient against a broad range of threats."
Read the BIS bulletin: