Systemic Resilience and Fragility of the Cash Infrastructure

At the recent Asia Cash Management Association meeting at the Asia Cash Cycle conference in Bali, Scott Forster of the CPT Group presented on the systemic resilience and fragility of the cash infrastructure. For cash to survive, the cash infrastructure must be sustainable and viable.

Australia, New Zealand, Brazil, and Sweden have all experienced a rapid change in cash volumes. This is hard to manage, and once cash infrastructure is gone, it is hard to rebuild.

In New Zealand, the two largest CITs merged, and the competition regulator has more limited powers than in Australia. The result is that the merged business now has no market or regulatory constraints on price or service.

The Banco Central do Brasil launched its Pix digital payment system in 2020. By 2024, 46% of adults used it as their primary payment method. As a result, cash withdrawals have declined by about 10% per year since it was launched. The rapid pivot has left the traditional cash eco system hollowing out.