Are Central Bank Policies Aligned with The Need for Cash?

As we are aware, the use of cash is most certainly not being promoted with the same vigour that the use of electronic or mobile payments has been in recent media and advertising. This naturally leads to the question ‘are central banks, as responsible for the policies that define payments, really aligned with the still relevant need for cash that citizens need?’ 

Central banks are usually autonomous. Their autonomy from changes in governments due to elections is meant to allow each nation’s best economists to define the best policies for the health of a nation’s financial stability and ultimately, for the value of their currency.

However, in the past decade or so in Latin America, the promotion of cash usage is not nearly as sexy for politicians as the promise of seamless, fast and ‘trouble- free’ electronic or mobile transactions. This reality, married to the need for financial inclusion of lower-income citizens who are often not part of the commercial banking system, obviously makes alignment with the use of cash more difficult for some central banks.