Report finds cash usage declines as hoarding grows

October 01, 2021 1 min read

Report finds cash usage declines as hoarding grows

By Arthur L. Friedberg , Special to Coin World, Published: Sep 27, 2021, 8 AM

The Future of Cash is the title of a discussion paper by Solomon Tarlin of the Supervision, Regulation, and Credit Department of the Federal Reserve Bank of Philadelphia, and published in September by the bank as part of its Consumer Finance Institute Discussion Paper Series.

The conclusion is that, while hard to predict, the decline of cash as a medium of exchange will continue and the important question is the speed and extent of the shift to digital currencies. Also noteworthy is that while cash is being used less in commerce, the amount of currency in circulation as a share of gross domestic product has been steady or even higher, perhaps because while people may not be spending cash, they are hoarding it.

The impetus for the report was an ordinance enacted by Philadelphia in March 2019 that required all businesses to accept cash, followed by similar regulations elsewhere.

The paper went on to examine some of the reasons for the changing landscape. From 2016 to 2019, cash payments made in the United States fell from 31% to 26%, despite the fact that automation has made cash easier to count and use, and the cost of accepting it is less than for credit cards. Yet cards have become more popular because of rewards programs, low interest rates, and consumer convenience.

  The original article and others can be found at