What a study linking currency in circulation and coronavirus transmission rate shows.
India’s heavy demand for cash – nearly 94% of transactions are made out in cash as per a recent survey – is unlikely to have significant implications for the spread of Covid-19 in the country. This is because there is, at best, a weak correlation between the amount of paper currency in circulation per individual and the virus’ transmission rates across countries, showed an analysis of recent global data. On March 16, in the week leading to the lockdown, the Reserve Bank of India had suggested increased use of cashless payment methods to curb the spread of the virus. Communication around cash usage became a bigger problem when advisories from the World Health Organisation and central banks across the world suggested that cash could carry and spread the novel coronavirus, or SARS-CoV-2, as it is now known. To investigate this alleged link between currency in circulation and the spread of Covid-19, we looked at correlations across countries for currency in circulation as of 2018 and confirmed Covid-19 cases as of July 15. The figure below plots the currency per capita, in terms of hundreds of US dollars, to the total cases per million persons in that country. This does not permit any comment on causality, and is based heavily on reported infection rates, which may be underestimated for lack of testing. When we looked at an alternative measure – the likely links between the currency-gross domestic product ratio and total cases per million – we found no correlation. For example, in Sweden, this ratio was 1.3% as of 2018 and total cases per million are 2,186. In India, the ratio is higher at 11.2% but total cases per million are at 29. In areas worst-affected by the pandemic, such as the United States and the Eurozone, a large fraction of cash is held outside these countries and thus, may not be associated with domestic infection rates. Although there is no information available on the newest strains of the novel coronavirus, scientific studies compiled by a team of medical researchers in Germany suggested in February that the time that the virus survives on paper, plastic, and glass surfaces is similar – four to five days – depending on the type of strain. In a March 2020 article in the MIT Technology Review, associate editor Mike Orcutt responded to the World Health Organisation advisory by pointing out that shoppers are more likely to contract the disease from others in the aisles, not at checkout counters.
