February 2023

EDITORIAL: Access to and availability of cash

As the use of less-cash technology continues to grow, particularly in developed economies, so does the demand for banking services decline. This provides the ideal opportunity for banks and financial institutions to close branches, particularly in less populated localities and regional towns, making it increasingly difficult for people in those areas to manage their finances and importantly to deposit and withdraw cash.

Banks, which arguably consider branches as a cost and not a community service, continue to announce branch closures with seemingly little regard for those who rely on cash in their daily lives. Such people include those who are typically more economically vulnerable and less technologically capable. This cohort often uses cash for budgeting and managing household finances, and it is for them that cash remains critical.

Governments, as they have done in the UK, must consider the impact that these branch closures and related loss of financial services is having on cash-reliant people and the communities in which they live.

I’ve previously referred in this column to the introduction in the UK of the Financial Services and Markets Bill, which is likely to be passed in the UK Spring of 2023. In May 2022, the UK Government announced its intention to legislate to provide the Bank of England with the “powers necessary to ensure the UK’s wholesale cash infrastructure – which includes the network of cash centres integral to the sorting, storing and distribution of notes and coins – remains effective, resilient and sustainable and continues to support cash across the UK”.

This is a clear signal to banks and other financial institutions in the UK that, while decisions about access to cash maybe ‘voluntary’ there is an expectation from the UK Government that cash will be readily accessible to everyone.

While this does not guarantee access for all, it is a legislative model that policy makers in other countries should consider to ensure that those who rely on cash for legitimate reasons will continue to have access to cash – both notes and coins.

MDC 2023, Canada, 15-18 October 2023

MINTING FOR THE FUTURE – Registrations are now open.

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