Cash is a Public Good, Not a Crime

Cash Matters, a movement by the International Currency Association ICA, has published a new white paper written by Dr. Ursula Dalinghaus - a postdoctoral scholar at the Institute for Money, Technology & Financial Inclusion at the University of California. It shows there is little to no evidence that limiting cash will effectively target the financing of crime and terrorism. Targeting cash simply misidentifies the problem.

In her white paper "Keeping Cash – Assessing the Arguments about Cash and Crime", Dr. Ursula Dalinghaus argues that "curtailing cash will do little when criminals already make use of a diverse portfolio of payment technologies and types". Increasingly, electronic forms of transmitting and converting value were just as essential, if not more so, in supporting criminal as well as terrorist activities, she adds. Instead, legal tender – in the form of cash – should be regarded as a public good that guarantees ease of use, accessibility, a certain level of privacy, and many other unique qualities. Findings from Dr. Dalinghaus' study have been included in an EU-wide consultation to be used by the European Commission in Brussels to determine the policy implications of cash restrictions.

Dr. Ursula Dalinghaus is a postdoctoral scholar at the Institute for Money, Technology & Financial Inclusion (IMTFI) at the University of California, Irvine.

The study is the most comprehensive approach to the issue of cash and criminal or terrorist activities to date. It draws from a wide range of institutional, legal, academic, policy, news media and other sources as well as quotes from experts in criminology and terrorist financing, banking, industry, and the social sciences. Many of the sources cited in this paper have never been taken into consideration before, thus providing fresh insights and new perspectives on the debate.


Targeting Cash Will Not Stop Crime and Terrorism Financing

EU Initiative to Limit Cash Payments

“Keeping Cash – Assessing the Arguments about Cash and Crime” has been published by Cash Matters, a movement by the International Currency Association (ICA) which also funded the paper. The study was commissioned early this year when the EU issued an impact assessment on its initiative to implement a harmonized limit on cash payments across the EU member states. “We knew we needed substantial, well founded, and scientifically sound arguments in order to convincingly make the case for cash when talking to the EU”, explained Andrea Nitsche and Gerben van Wijk, responsible for Cash Matters. “The IMTFI has an excellent reputation, and we were very pleased when they consented to a scientific evaluation. Fighting crime and terrorism requires a concerted societal effort and activities across a wide range of areas. Focusing on cash will not achieve the desired effect.”

Cash Matters is a pro-cash movement that channels the voices that support the existance and relevance of cash as an integral part of the payment landscape now and in the future.

Fighting crime and terrorism requires a concerted societal effort and activities across a wide range of areas. Focusing on cash will not achieve the desired effect.

 «

Andrea Nitsche, Cash Matters

Key Findings of the Study

The paper "Keeping Cash – Assessing the Arguments about Cash and Crime" draws on data and facts well beyond the European scope and collates a wealth of new material and hitherto unknown studies that cast fresh light on the discussion and open up new perspectives. Based on the preliminary view of evidence, this paper finds that a policy that targets cash alone is not only shortsighted; it also misidentifies the problem.

  • Multiple methods: Digital forms of payment are also subject to abuse and do not necessarily guarantee transparency in accounting which many believe could aid in the tracking of financial crime. In addition, the shift to digital away from cash exposes people to new risks.

  • Different jurisdictions: The movement of value across jurisdictions is subject to different regulatory environments and payment cultures. Targeting cash in isolation does not take into account this interplay and risks displacing criminal activities involving cash to other tools and jurisdictions.

  • New burdens: Researchers studying the impact of demonetization in India and capital controls in Greece have been observing that cash restrictions entail new social and economic burdens and are shifting the costs of making payments onto small businesses and disadvantaged groups in society.

  • Stability factor: Physical cash denominations concretize value and act as a stabilizing agent in the financial system.


Why Cash Matters

About the Cash Matters Movement

Cash Matters is a pro-cash movement, which channels the voices that support the existence and relevance of cash as an integral part of the payments landscape now and in future.

  Visit Website