Nowadays too few want to hold cash.
Banks have used modern technology to update their credit and debit cards with cash. Others have pre-stored details for transactions and services or to transfer to another, using only mobile phones.
Some have even suggested that cash should be phased out to save money spent printing and distributing it.
If cash were to be eliminated altogether it would do away with the annoying lines of people who continue to insist on using it.
Lawyers, among others, dislike cash as it is an entirely anonymous store of value for criminals. Now rather surprisingly, bankers are joining the anti-cash group and shun cash and, to that end, sometimes charge negative interest rates on cash. Still some want to hold cash.
Many have assumed that as nations become wealthier and their financial institutions develop, the amount of cash in circulation would expand and then begin to contract as cards and coins started to replace that. In Sweden this trend has meant that cash in circulation has fallen significantly. Robbers increasingly are being foiled as the amount of cash has dropped. Churches report that their collection plates have less cash left there.
It is rather curious that some rich nations like South Korea are enthusiastic hoarders. The government there has reduced the interest rates and thus the return that could be earned is subject to a tax. It is estimated that the total of cash held in private safe deposit boxes has soared. Some have inferred that the amount of cash has tripled over the past four years, but that cannot be confirmed.
Too, private individuals now are more reliant than ever on piggy banks, thus greatly reducing the amount of cash flowing around. This amounts to a partial explanation of the diminished cash in circulation. Cards and the low value of cash transactions diminished cash in circulation, but high-denominated bank notes are highly prized.
Overall cash in circulation is less sought after by all, but it seems to retain its lustre as a store of value. Evidence of this, high denomination bank notes now account for about five per cent of the value of bank notes, up sharply from a few years ago.
These high denomination bank notes are not in use for ordinary purchases. After all, which retailer would give customer change for a $1,000 bill? That explains why gold sovereigns command such a large premium over the inherent gold bullion prices therein.
Despite those who have denigrated its importance, cash is still pre-eminent in its importance in the economy.