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Opinion
Nicholas Colas

Reports of Cash's Death Are Greatly Exaggerated

Individuals see paper currency as a store of value and hedge against another financial crisis
Demand for physical cash is growing.

Demand for physical cash is growing.

Photographer: Simon Dawson

The end is nigh for cash, or so a wide range of academics, fintech venture capitalists, and futurists would have us believe. Soon we will pay for goods and services with some combination of smartphones, biometrics and tiny chips embedded in our bodies. Bitcoin and other crypto-currencies may even replace government-backed forms of money, or so the story goes.

That may be the future, but it’s not present-day reality, where individuals still see real utility in holding paper currency for both day-to-day transactions and as a store of value and hedge against another financial crisis. Physical cash in circulation in both the U.S. and Europe is growing at a healthy clip, even with all the new technology. This is not solely due to the dramatic increase in $100 bills or high-denomination euro notes over the last decade. There’s been a big increase in workhorse denominations -- $1 through $50 bills and 1 euro to 50 euro coins and notes.