Bank Of Canada is facing problems. Barry R. Campbell who is a former Member of Parliament and now a lobbyist for firms in financial services and other sectors is of the opinion. That the death of cash transactions has become a problem for the Bank of Canada.
With the advancement of technology, people start giving more preference to contactless transactions and after the arrival of COVID-19, it has become more evident.
Infection disease specialists warned that the COVID-19 virus could stick to the surfaces of hard currencies. Therefore, the number of cash transactions has been decreased in a drastic manner.
Some retailers also announced that they would not accept cash anymore. However, The Bank of Canada is trying its best to revive this traditional transaction. Although the government of Canada asked Canadians to limit physical transactions, the Bank of Canada urged retailers to accept cash. The Bank warned. “Refusing cash purchases will put an undue burden on those who depend on cash and have limited payment options”.
Even before the pandemic, the Bank of Canada was energetically defending cash. The Bank considered it as “an old and simple payment technology”. It is widely accepted and it protects privacy as it can be used without disclosing any identity or personal financial information. Moreover, it is a cheap alternative to credit cards.
The Bank of Canada has been defending cash as essential for “financial inclusion”. It is an ideal option for those people who have difficulties accessing alternative payment methods such as mobile wallets or credit cards. The Bank also has a monopoly on issuing the stuff, and that monopoly is key to its control of monetary policy.
According to Barry R. Campbell, “One can extoll the virtues of paper currency and believe it is superior to some ethereal digital thing. But an unseen virus makes you question the wisdom of handling money, even if you break quarantine to get to the ATM or the bank. In the COVID-19 crisis, use of cash has declined. Tap – contactless payments via credit and debit cards – has become king where cash once was”.
He also added. “For young demographics, cash has long been a quaint relic – something your grandmother puts in your birthday card. For others, resorting to alternatives (such as card taps or digital currencies) has likely accelerated in direct proportion to the perceived risk of infection. Before the COVID-19 pandemic, central banks began modernizing cash. By replacing the old paper bills with polymer banknotes touted as washable and harder to counterfeit”.