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A Greek tragedy: 'The death of cash'

Not a week goes by without some Cassandra predicting the demise of cash. But Greeks' desperate quest to find stocked ATMs says that's more theatrics than fact.

July 9, 2015 by atm Atom — blogger, atmatom

First Cyprus and now, apparently, Greece. For the second time in two years, a Mediterranean country has spent well beyond its means, running up unsustainable levels of debt.

With "lender fatigue" seemingly poised to eclipse fear of an EU split, the holders of Greek debt have apparently had enough. As a result, it appears that Greece may default on its debt. Whether that means a Greek departure from the EU or a return of the drachma remains to be seen.

As we saw in Cyprus, Greek citizens have panicked and a run on the banks is the result. Greek ATMs are now emptied, banks are temporarily closed and depositors have lost access to their money.

Whether Greece will try to inflate its way out of debt or whether it will copy Cyprus in levying "deposit taxes" on savings are open questions. The only certainty is depositor inconvenience at the least, and the potential loss of depositor funds at worst.

Now, say you are a depositor in a deficit-plagued country (know any?) being pressured to reduce government spending and to increase taxes. How certain are you that your country might not suffer a similar fate?

I may be dead wrong, but given recent developments in Greece and Cyprus and near zero interest rates in many countries, global mattresses are starting to look pretty secure and ATMs around the world had better get warmed up.

It seems that not a week goes by without someone predicting the death of cash. Yet in spite of all of the new technologies and endless customer surveys showing an affinity for mobile wallets and the like, cash use has not declined.

Throw in a little growing political uncertainty and just watch what happens to the global use of cash …

This article has been republished from the Triton blog, atmAToM, with kind permission from Triton.

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