Reports of the demise of cash are vastly exaggerated. Notes and coins have been with us a long time, and have served a crucial role in the growth of the modern economy. I suspect they will be with us for quite some time more. BIS central bankers’ speeches  1  Three “C”s of a good payment instrument But be it physical cash or electronic payment, the medium of exchange for transactions must satisfy three requirements. I will refer to these as the three “C”s of a preferred payment system – confidence, convenience, and cost-effectiveness. First, confidence. Businesses and consumers must be assured of the security of payment instruments. The widespread circulation of counterfeit notes and coins can impair confidence in a country’s currency. As John Maynard Keynes put it nearly a century ago, quoting Lenin, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.” Keynes was, of course, talking about the deleterious effects of inflation. But it applies just as well to debasing the currency through counterfeiting. Ensuring the fidelity of notes and coins and the soundness of electronic payments is therefore a critical function. Central banks and currency issuing authorities must continually innovate and stay ahead of fraudsters. In electronic fund transfers, we have instituted more end-to-end security measures like two-factor authentication. Modern currency notes come with very advanced security features. I wanted to give some examples, but have been advised that it would be tantamount to giving away our secrets!
Ravi Menon: Three “C”s of a good payment instrument Welcome address by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS), at the Currency Conference 2011, Singapore, 3 October 2011. *  *  *  Why cash is still king Distinguished guests, ladies and gentlemen, good morning and a warm welcome to Singapore and the 2011 Currency Conference. Singapore is honoured and delighted to host this flagship event. The late Mr John Shepherd-Barron, who pioneered in 1967 the development of the Automated Teller Machine, or ATM, said during a 2007 interview: “Money costs money to transport. I am therefore predicting the demise of cash within three to five years.” Shepherd-Barron believed fervently that we would soon be swiping our mobile phones at till points, even for small transactions. We have indeed seen an increasing use of cashless payments at point-of-sale. Electronic payment alternatives have mushroomed in many countries, ranging from contactless stored value cards in Singapore to real-time settlement of electronic fund transfers in the United Kingdom. But cash remains “king”. Even in advanced economies. This is especially so for person-toperson transactions and micro-payments. Take high-tech Singapore. The use of electronic payments has proliferated rapidly in recent years. Yet, currency-in-circulation has been growing at an average 7 per cent per annum during the last ten years. This has reflected demand from a growing population and a growing economy. Less well known is how the demand for cash globally is being driven by tourism.