Cash, Coins and Covid

On Wednesday 23 June – Alan Turing’s birthday – there was to be a Celebration of his life and legacy, at the iconic Courthouse in Knutsford where he was famously tried in 1952. The plan was to talk about what Alan Turing’s legacy should stand for – educational opportunities in STEM subjects in particular, rather than the usual mawkish nostalgia about a codebreaker who won wars and then got hounded to death for being gay (neither of those things is completely true).

Well, you know what happened to in-person gatherings of more than a few people during June, and there wasn’t any realistic way to characterize this one as a wedding. So it’s been postponed, whether you believe that the spread of Covid is actually influenced by this sort of thing or not. (Personally, I can’t quite understand why the virus eschews weddings but not events which promote the role of women in computer science. But there we are. We’ll do it in September.)

Wednesday 23 June is, Covid notwithstanding, the day the Bank of England will finally release new plastic £50 notes onto the public which bear Alan Turing’s picture and various images relating to computer development, which is an exciting way to mark his legacy to the industry – and nicely moves the agenda away from the mawkish nonsense. But it does leave us with an interesting question, which is what the £50 note is for.

Some readers may remember a world before Covid, when shops actually accepted cash. But even then, the £50 was treated with suspicion. Special pens were kept in drawers under cash-desks so that cashiers could check whether a paper £50 was a forgery. Taxi-drivers refused to accept them. Many people asked what legitimate reasons exist for high-denomination notes. (There are some; one is the shoe-box full of them for savings purposes, which in a low-inflation high-service-charges world may make more sense than a bank account or a badly-performing investment fund.) Still, one wonders whether the plastic £50 is going to be the last gasp of a cash economy.

New financial instruments are on the horizon. No, I’m not talking about Bitcoins or other cryptocurrencies. But central banks are muttering about ‘central bank digital currencies’, where every citizen holds their cash on the central bank’s books and banknotes are history. Payments would be made by tapping your phone on a reader. At a stroke, you’d not need banks, card intermediaries, card issuers, you name it: swathes of the financial services marketplace would be cut down like straw at the end of a season. Except that we’d still need banks for loans, credit cards for credit, and so on; and without retail cash deposits to help finance the lending, it’s not clear how the digital currency model would help. Maybe we’ll still need banks, and still need cash. Oh, and plastic notes can easily be wiped free of virus particles.

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