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What is cash really?

By Craig Lawrance


What is that cash in your physical wallet?  I mean that paper/cotton/polymer stuff with images of presidents, authors, engineers and bridges.  Perhaps it is just a few coins in your pocket. Why are they worth anything at all?  Why do they have any value?

The common answer is that money represents a store of value because it is legal tender in your country or region of the world. Or because it’s accepted internationally as an item of value. The other angle is the fiat one.  It’s money of value because the government says it is.  Fiat translates something like “Let it be so”.

The US Dollar and international trade.

In the case of the US Dollar, we have a currency that has been backed by US hegemony since the end of WW2.  International trade between many non-US-denominated countries has historically taken place via the US Dollar.  This increases demand for the US Currency and keeps it relatively strong over the longer term.

At the consumer level, we can travel the world with the US Dollar, because virtually every country finds a way to accept it as payment, except those few places where they are desperate to keep control of their own currency.  Domestically the US Dollar in cash is used widely for tipping and most importantly as the one remaining way to spend money anonymously. Whether the US Dollar remains the most favored traded currency is doubtful. Ray Dalio’s history of empires paints a picture of cycles that shows that all currencies have their day in the sun. 


This need for US Cash still drives the need for ATM Networks and thankfully the NonStop servers that still drive them. 

The threat to cash includes the convenience factor that comes with card spending, no pennies to make holes in your pockets, and the Central Bank Digital Currency (CBDC) which has been talked about for some time.

CBDCs vs. Cash

Biden recently signed an executive order giving the green light to CBDCs.  One might suspect that given the recent North American bank scares of SVB, the government might want to reassure the public and the financial system as a whole that the fiat system is good and whole.  Given the fact that something like 65% of all the US dollars in the system were created since the announcement of the 2020 pandemic, it’s little surprise there are gremlins in the financial system that need to be flushed out. 

Cash in crisis?

Expect that if we enter another financial crisis, and let’s be skeptical for a moment: if Yellen says there won’t be one, we can be pretty sure there will. Expect our dear leaders to use any such crisis as an opportunity to seek greater control over our money supply and its usage.  Governments historically never fail to waste a crisis in their efforts to accrue more power.

While no one is suggesting something similar to the Global Financial Crisis of 2008 will happen, burdened by subprime debt that led to the collapse of a number of financial institutions, but rather a shift in confidence in even the biggest of banks. As central banks step in to support banks “too big to fail” –moves backed by Governments – could our cash diminish in value so steeply that it becomes worthless? Could further eroding of confidence lead to an end of our love affair for cash?

Survival of (the fittest) cash!

Which brings me back to NonStop centric ATM Networks and Switches: cash will be with us for some time. Whether usage for tips or as has become routine of late, payments to those in the gig economy or simply providing casual services, there is nothing like  having cash on hand in one form or another.   While on the wane in some industry verticals, NonStop systems will continue their dominance in the field of cash dispensing as they are just so reliable and relatively low-cost. Even as many financial institutions maintain their 5 year plans to migrate off NonStop, messing with ATM Networks and Switches is not for the faint of heart. Their removal doesn’t warrant the risks involved. As the old adage notes – if it works, don’t fix it!