Dirty Money: Does the Risk of Infectious Disease Lower Demand for Cash?

The coronavirus pandemic is a global crisis like no other in modern times, and there is a growing apprehension about handling potentially contaminated cash. The IMF has produced this paper as the first empirical attempt in the literature to investigate whether the risk of infectious diseases affects demand for physical cash.

That being said, it is not possible for all countries to abolish cash altogether. What this means is the transactional constraints imposed by the COVID-19 pandemic have become a catalyst for speeding up the shift toward digital forms of money across the world and policymakers cannot treat digital transformation of financial services as a binary process.