Virtually Irreplaceable: Cash as Public Infrastructure

New study, "Virtually Irreplaceable: Cash as Public Infrastructure", substantiates the case for how and why cash must be regarded as a public good.

Click to download white paper

The paper by Dr. Ursula Dalinghaus, Visiting Professor of Anthropology at Ripon College and affiliated scholar at the Institute for Money, Technology & Financial Inclusion  (IMTFI) University of California, takes a close look at the role of cash in society and the specific characteristics making it a public good, citing relevant studies, scholars and field experiments.

“Cash in circulation is growing on a global scale by approximately 3% per year; 80% of all payments worldwide are cash transactions. Cash is an essential part of every stable financial and economic system”, stated ICA Chairman Wolfram Seidemann. “This paper demonstrates that cash is more than just a means of payment. It is a public good, part of modern life and vital for people’s everyday lives.”

Key takeaways

• Cash is a public good that guarantees ease of use, accessibility, privacy, and many other unique qualities in local, national, and global monetary systems. Cash fulfills both criteria for a public good: it is non-excludable because its function as a means of payment, of transfer of value, works without compensation. And it is non-rivalrous because its use by one person does not preclude its use by another.

• Cash is public – the only form of money not controlled by a private, profit-driven entity. Once in circulation, it is the only form of payment independent of its issuer. It is deployed not to make a profit on its transfer but to support and sustain value transfers free of charge. There may be costs associated with cash, but cash itself is a means of value transfer that settles at face value with no fees involved.

• Cash enables personal freedom and self-determination – state-issued physical cash is a distributed public infrastructure that allows citizens and users to create a space outside the state. At the same time, cash acts as a claim upon central banks and, ultimately, states to ensure good governance of monetary and payment systems.

• The materiality of cash is vital to many social practices. The role cash plays in social relationships often hinges on the physical design of cash, such as denomination, which makes cash particularly useful for budgeting, accounting, gifting, or saving.

Download white paper - US Letter (8.5" x 11")

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Read interview with author here.

This is the second study by Cash Matters, a movement by the International Currency Association, ICA. The first study, “Keeping Cash – Assessing the Arguments about Cash and Crime” was published in September 2017. 

Money at the Margins Q&A

Paperback release by UCI IMTFI researchers shines light on the human impact of mobile money, financial technology  

When three anthropologists embark on a study of new money – e-commerce, cash cards, mobile money, retail credit cards, and more – the findings can easily fill a book. Money at the Margins, by researchers at the Institute for Money, Technology & Financial Inclusion(IMTFI) at UC Irvine, takes a deep dive into the global uses and local impact of new forms of financial services, and the many ways in which technology is changing the way people think about, spend and save money. Here, editors Bill Maurer (BM), Ivan Small (IS) and Smoki Musaraj (SM) discuss how they came to study money and why understanding the human impact of new technologies and money’s use matters.

Photo credit: Scott Mainwaring

How - and why - do three anthropologists come to study money? And how is that study different from one an economist might do?

SM: Anthropologists have been studying money for a long time, providing a critical perspective of its meanings, uses, and changing forms. One key insight by anthropologists is noticing that money takes on different meanings and values in different contexts; in some contexts, for instance, giving money as a gift is considered an insult while in others it is a symbol of affection and respect. Another aspect of the study of money unique to anthropology is taking a broader approach to the objects that are used as money in different cultural contexts. A number of the contributions in Money at the Margins, for instance, introduce us to a wide array of objects--cash, jewelry, mobile money, retail cards, social status--used as money in everyday transactions. These studies underscore the multiplicity and the earmarking (using different kinds of money for specific purposes) of different forms of money by people living under $2 a day.

IS: Each of us came to this project having previously done research on various aspects of money in the global economy, from international remittances to pyramid schemes to offshore and Islamic banking and alternative currencies. In our prior studies, we were keenly interested in the social and cultural aspects of money – how it shapes and how it reflects various societal formations and transformations. The introduction of the book describes some of the general frameworks from economic anthropology and sociology where we see potential interventions. These approaches typically differ from economic theories of money in that they are more attuned to what money reveals rather than what money does – the classic economic definition being that money acts as a unit of account, means of storage, store of value, and method of payment. But it is always also more, and when one emphasizes an observational rather than utilitarian or predictive approach, it becomes apparent that the seemingly universal tool of money operates differently in different contexts. As editors but also anthropologists, we encouraged the contributors to dwell on their own participatory immersion and qualitative observational approaches, letting the stories they encountered during research lead the way, rather than push for interpretive closure. The outcome is illuminating. When we hear for about the extremely lively and social spectator dimensions of rotating credit associations in Nepal described in Sepideh Bajracharya’s chapter, or the ways that dual currencies map on to the ways Cubans conceptualize their country’s position inside and outside of a global economy in Mrinalini Tankha’s work, as just two examples among many, we gain a taste of the rich socio-cultural complexities of money.


Various chapters in the book talk about new forms of money - particularly mobile money. What is it, why is it important, and how is it used differently around the world?

IS: Mobile money has served as a specific, and relatively simple, technology to address a basic challenge of how to transfer value across distance when one does not have a bank account. Mobile money is essentially value that is remitted, stored, paid and cashed out via cellular phones and demonstrates how people around the world have found creative ways to address their financial needs by using the tools that are most immediately available to them. Here in the U.S., we generally have monthly cell phone plans, and most of us have smart phones. In many countries in the Global South, however, people use simple Nokia style phones from a previous generation to communicate, and generally pay for their service through top up plans. That is when you run out of credit, you buy credit to top it up and do so by inputting the pin number into your phone. Very early on, rural to urban migrants in places like Kenya figured out that this top up plan also offered a way to transfer value across distance. Instead of buying credit to top up one’s own phone, you call your mother in the village and give her the credit, so that she does not have to pay for it and can save that money for other uses. Before long, people were cashing out that credit, by passing on the code to a third party who would then give money in return, minus a small fee for their service. So innovation for remittance solutions was being driven from below. Once the telecommunications companies saw this, they began to formalize and enclose the process. Now, you have formal systems of value transfer, called “mobile money”, which have become widespread in countries like Kenya and the Philippines, especially where government financial regulators have allowed telecom companies to provide banking-like services. With the success of mobile money have come other offerings, such as micro-loans that gauge one’s creditworthiness based on one’s mobile money history. This in turn has led to the development of entire ecosystems of cashless economies among the unbanked. What is more, participation in such systems have also in many cases provided on-ramps to formal banking and thus proper “financial inclusion”. But the results are mixed, and to understand how uptake differs between countries, regions, ethnicities, genders, and generations one has to approach the issue with an ethnographic lens, which is what many of the chapters in the book do.

SM: The research compiled in this book demonstrates that new forms of money--such as mobile money, digital cash grants, and department store credit cards--are used for different purposes in different contexts. One key finding is that these new forms of money are used alongside (rather than instead of) more traditional forms of money such as cash or bank cards. Another key finding is that these new forms of money are used in accordance with socio-cultural norms. For instance, in Kenya, according to Sibel Kusimba et al, mobile money is often used to make social payments for funerals or weddings; in India, according to Mani Nandhi, mobile money is primarily used for savings. In other words, the book calls attention to regulatory as well as socio-cultural context for understanding the uses (or lack thereof) of mobile money.

Other chapters highlight the socio-cultural effects of these new forms of money. Kusimba notes that mobile money enables people, especially women, to redraw their social networks; Kevin Donovan however, argues that bank-mediate cash grants for low-income citizens of South Africa have introduced new concerns about the privacy and financial autonomy of the unbanked. All in all, these chapters underline the complex dynamics involved in the meaning, value, and uses of new and old forms of money.


Mobile money has been touted as a potential solution to financial inclusion. What does that mean and if it’s not a solution, what might be?

BM: This is a contentious topic. Very early on in the development of mobile money services, they were pitched to government regulators as a way to get people into the formal economy--the economy of digital recordkeeping rather than the informal economy of cash--so that governments could assess and collect taxes. That was a great sell to the governments, but didn’t really inspire anyone else.  Spurred on by the United Nations Millennium Development Goals which called for providing universal access to formal financial institutions, mobile money providers started stressing “financial inclusion.” The idea was that using mobile money was an onramp to things like bank accounts and bank loans. On the one hand, being included into formal financial institutions like banks means greater consumer protections, guarantees against fraud, and safeguards from theft. On the other hand, as we all know from predatory lending practices, usurious interest rates, and the financial crisis of 2008, “financial inclusion” can expose people to new kinds of risks. Nevertheless, at least in some contexts, mobile money has opened doors to banking for many poor people who previously had those doors shut in their faces.

SM: Echoing Bill’s comments, read together, the chapters in this book provide insight into a number of pros and cons of various financial inclusion efforts, including mobile money services, in various parts of the Global South. The case of Kenya, which we have brought up frequently here, underscores the potential of mobile money to extend access to financial services to people living in remote rural villages. A similar case is made by Jing Gusto and Emily Roque on the benefits of cash grants via banks for various communities in the Philippines. In other words, mobile money can remedy some of the limitations of existing formal financial institutions. But research in other areas or with specific groups, shows that these new forms of money are not always convenient, inclusive, or cheaper. For instance, Ndunge Kiiti and Jane Mutinda show the limitations of mobile money for the visibly impaired in Kenya while Gusto and Roque discuss how indigenous populations in the Philippines are excluded from digital cash grants. Some researchers provide explicit recommendations for policymakers and industry leaders in designing better financial products that are tailored to people’s contexts and needs. For instance, Echeverry and Cuartas draw a list of recommendations for future financial products that would target the unbanked in Colombia. These recommendations challenge industry leaders to reimagine their ways of measuring creditworthiness and value and to think creatively about expanding access and reach.


Your title is an interesting one - Money at the Margins. What do you mean by “margins” and why is studying money practices here important?

SM: Our focus on the “margins” of global economy calls attention to the various economies that proliferate at the margins of global financial flows. These economies take place mostly (though not entirely) outside formal banking systems and regulatory regimes, are typically in cash (and soft currencies), and cut across multiple markets and payment platforms. Some examples discussed in the book include cash and mobile exchanges among migrant laborers along the Haitian/Dominican border; rotating and savings associations (dhukuti) among social networks of women and men in Nepal; game networks operators that provide financial services to informal workers in the city of Medellin, Colombia; and shared usage of department store credit cards among low-income families in Chile. These chapters provide insight into how these economies of the margins seek to circumvent the forms of exclusion generated by formal financial regimes. For instance, the study of financial practices along the Haitian/Dominican border by Taylor and Horst highlights the creative economic practices that Haitian migrants deploy to circumvent the structural forms of economic and political exclusion that the border imposes on their livelihoods.

IS: Development practitioners call the poorest of the poor, who for the most part do not have bank accounts, the “bottom billion”. While they may be at the bottom of the formal financial economy, they also represent 1/6 of the world’s population, and for this reason we wanted to re-center what those who are on the so called economic margins are actually doing and re-think why we consider them marginal. There is of course an important practical aspect - while the bottom billion was for a long time ignored by the banking sector, now there is increasing attention to how empowering the unbanked with small lines of credit and microfinance, or safe and cost effective remittance transfer channels, can help reduce poverty in some of the world’s poorest communities. Effectively addressing poverty also demands challenging the political and economic structures that are designed to include some while excluding others. These initiatives are important and ongoing, and in the meantime attention to the financial lives of the poor have also heightened recognition that the poor actually navigate quite complex spending, transfer and savings patterns. This includes how unbanked populations creatively navigate their experienced limitations but also intersections of participation in financial institutions and infrastructures. Reflecting on money at the margins then is also about disrupting a simplified and often misleading formal / informal analytic binary when it comes our understandings and perceptions of what constitutes the economy.

IMTFI Fellows Jude, Sangaré and Kusimba at Day 3 Workshop (2014)
Photo credit: Steve McCord

What insights did you gather in working with so many researchers and how might this information be used?

SM: I felt personally committed to this project precisely because of its mission to bring together research from diverse and interdisciplinary group of scholars from or based in the Global South. The prime goal of this volume (and of IMTFI generally speaking) was to produce and disseminate first-hand knowledge about technological innovations in the sphere of money and financial inclusion from the perspective of people living in the countries and contexts where such developments are taking place. These voices are by and large absent from the spaces of policy-makers and industry leaders interested in new money technologies for financial inclusion. Findings from this book altogether suggest that the success or failure of technological innovations such as mobile money are context-specific. For example, while the mobile money service, M-Pesa, has been extremely successful in Kenya, overcoming the usage of formal banks for money transfers and remittance sendings, similar services have not had the same success in countries such as India or Colombia, where the so-called unbanked find cash or other forms of money more convenient and less costly.

BM: So many of the high-level conversations about new financial technologies or “fintech”, and about “banking the unbanked” or financial inclusion, take place in the halls of global institutions without any representation from the people and communities actually impacted by these new technologies and systems. We set up IMTFI specifically to remedy this - to build a global brain trust of researchers from countries where new payment and financial technologies were being “deployed” (and we chafe at the military metaphor here!). We believe strongly in diversifying the voices at the table where big decisions are being made about the future of money and transactions. They provide important insights; fill gaping holes in knowledge; and put the spotlight where it ought to be: on the human side of new technologies and the role of money in helping people live the kind of lives they aspire to rather than some cookie-cutter mold predetermined by Silicon Valley, D.C. or London.


Money at the Margins now 25% off through Berghahn Books, use code BB25.

Bill Maurer is dean of the School of Social Sciences, professor of anthropology and law, and director of the Institute for Money, Technology and Financial Inclusion at the University of California, Irvine.

Smoki Musaraj is an assistant professor of anthropology and director of study of the Anthropology Honors Tutorial Program at Ohio University.

Ivan V. Small is an assistant professor of anthropology and international studies at Central Connecticut State University.


Web link: https://www.socsci.uci.edu/newsevents/news/2019/2019-06-13-money-at-the-margins

Social link: https://socs.ci/moneyatthemargins

Cash is not a Crime - New IMTFI white paper finds efforts to curtail cash use hurts poor and does little to stop terrorism financing

Keeping Cash: Assessing the Arguments about 

Cash and Crime  - New study by IMTFI postdoctoral scholar Ursula Dalinghaus 

Because it can be used anonymously, and is generally thought to be untraceable, cash has long been linked to crime: think of the image of wads of unmarked bills in a suitcase being passed between disreputable conspirators plotting evil. And while it is also commonly thought that cash is one of the primary tools to finance terrorism, recent news on the use of online platforms to fund US terror shows otherwise. Recently, there have been calls to eliminate cash altogether in favor of electronic payments systems, or at least to eliminate high-denomination banknotes.

Ursula Dalinghaus
Photo by Frank Cancian, UCI

In a new white paper published online this week, however, Ursula Dalinghaus, a postdoctoral scholar at the Institute for Money, Technology & Financial Inclusion (IMTFI) at the University of California, Irvine, demonstrates there is little to no evidence to support the claim that eliminating high-denomination banknotes or restricting cash payments will prevent terrorist attacks. The study finds that targeting cash as a terror financing mechanism misidentifies the problem.

“Curtailing cash will do little when criminals already make use of a diverse portfolio of payment technologies and types,” she says. "Increasingly, electronic forms of transmitting and converting value are just as essential, if not more so, in supporting criminal as well as terrorist activities.”

In addition, she argues that legal tender – in the form of cash – is a public good that guarantees ease of use, accessibility, a certain level of privacy, and many other unique qualities.

“Restricting cash payments entails the criminalization of legitimate payment activities when reliable data on the full scope of cash usage of any kind is scarce,” she says. “More research on payments and cash usage is therefore essential.” 

Key findings include the importance of the interplay between multiple payment tools and jurisdictions. People use diverse payment methods together, and the movement of value across jurisdictions is subject to different regulatory environments and payment cultures. Targeting cash in isolation does not take into account this interplay, and risks displacing criminal activities involving cash to other tools and jurisdictions. Multiple methods of interdiction are therefore needed to address money laundering and terrorist financing.

Drawing upon a range of institutional, legal, scholarly, policy, news media and other sources, in collaboration with experts drawn from criminology and terrorist financing, banking, industry, and the social sciences, the report documents how digital forms of payment are also subject to abuse and do not necessarily guarantee transparency in accounting that many believe could aid in the tracking of financial crime. In addition, the shift to digital away from cash exposes people to new risks. Researchers studying the impact of demonetization in India and capital controls in Greece are observing that cash restrictions entail new social and economic burdens and are shifting the costs of making payments onto small businesses and disadvantaged groups in society.

Findings from this study have been entered into a EU-wide consultation to be used by the European Commission in Brussels to determine the policy implications of cash restrictions.

Dalinghaus concludes that there is little to no evidence that limiting cash will effectively target the financing of crime and terrorism.

“IMTFI research around the world has consistently demonstrated the complex interplay of different forms of money and payment, so we shouldn’t be surprised that the bad guys also take advantage of diverse payment options. Criminalizing cash therefore won’t solve the problem,” says Bill Maurer, UCI anthropology and law professor and IMTFI director. “This new study also reminds us that criminalizing cash may criminalize the fact of being poor and living in a cash economy.”

Funding for this paper was supported by the International Currency Association (ICA) and its Cash Matters movement. 

Download the paper, Keeping Cash: Assessing the Arguments about Cash and Crime

Read Q&A with author here

About the Institute for Money, Technology & Financial Inclusion (IMTFI): Established in 2008 with funding from the Gates Foundation, IMTFI is a research institute based out of the University of California, Irvine. Its core activity has been supporting original research in the developing world on the impact of mobile and digital financial services, focusing on developing grounded, nuanced perspectives on people’s everyday financial practices and the impact of new technologies. To date, IMTFI has supported 147 projects in 47 countries involving 186 different researchers. These researchers have produced 12 books and 100+ articles in scholarly and other venues, and have been mentioned in the media 170+ times, in venues ranging from Bloomberg Businessweek and the Guardian to Forbes, India.

About the University of California, Irvine: Founded in 1965, UCI is the youngest member of the prestigious Association of American Universities. The campus has produced three Nobel laureates and is known for its academic achievement, premier research, innovation and anteater mascot. Led by Chancellor Howard Gillman, UCI has more than 30,000 students and offers 192 degree programs. It’s located in one of the world’s safest and most economically vibrant communities and is Orange County’s second-largest employer, contributing $5 billion annually to the local economy. For more on UCI, visit www.uci.edu. 

About the International Currency Association (ICA): Founded in 2016 as a not-for-profit organisation, the ICA represents the currency industry across the whole spectrum. It currently has 23 members and 5 associate members;  all members are suppliers of currency, or suppliers of products, technologies and equipment used in the design, production, handling and circulation of currency. The ICA is working to ensure that its members drive innovation and offer the best commercial and technical practices to their customers, promote the highest ethical standards, do everything in its members’ power to ensure that cash is secure, efficient and effective  and support and promote currencies worldwide as universal and inclusive means of payment. For more on the ICA visit http://www.currencyassociation.org/.  

Cash Matters, an ICA movement: Cash Matters is a pro-cash movement, funded by the ICA, which supports the existence and relevance of cash as an integral part of the payment landscape now and in future. Cash Matters will support and initiate campaigns on a global level, taking current issues and upcoming legislative changes into account. The Cash Matters website offers authoritative and to accessible facts, figures, and news for consumers, journalists and industry experts alike. For more on the Cash Matters visit www.cashmatters.org. 

Original post by UCI School of Social Sciences can be accessed here.

In fast-moving world of money and payments, anthropology finds a niche

by Jonathan Miller, Mario Einaudi Center for International Studies at Cornell University

Bill Maurer with cash, cards, and a new payment app.

Apple Pay, Venmo, Square – few aspects of modern life are changing more quickly than systems for moving money.

Ethnography, participant observation, domain analysis – few academic fields require as much time and patience as anthropology.

Yet the anthropology of finance is more urgent and relevant than ever, says Bill Maurer, professor of anthropology and dean of social sciences at the University of California Irvine.

“It’s been amazing to me how much people in IT, folks in the payment industry, really want to hear from us,” he said during a recent visit to Cornell. “Whether they call it anthropology, or the end-user perspective, or computer-human interaction, they want to know what people are really doing on the ground.”

Maurer, a leading figure in the social sciences of finance, was at Cornell to help kick off the Institute for African Development’s symposium “Mobile Money, Financial Inclusion, and Development in Africa.” His talk, “The Problems of Cash and the Perils of Cashlessness: Researching Mobile Money and Payment Infrastructure after M-Pesa,” looked at the “Cambrian explosion” in payment systems after the African telecommunications giant Safaricom launched M-Pesa, its cell-phone-based service, in Kenya in 2007.

einaudi.cornell.edu/working-group/global-finance-initiative

That explosion has brought millions of people into the financial system, making everyday payments easier while providing access to credit and other services. That can make a huge difference for people who need money for seeds, farming equipment, or other modest but crucial investments.

“That said, there are some pretty big risks in the extension of credit to people who haven’t had it before,” Maurer said in an interview.

“Often such people do have their own systems of credit, through patrons and family and kin, or through livestock or access to land,” he said. “When they are given a credit card or access to a formal line of credit it can be difficult at first to figure out how that is meant to interoperate with those other, older forms.”

He cites the case of South Africa, where workers began receiving their paychecks by direct deposit at the same time that banks got the power to reclaim debts directly from their clients’ accounts.

Mobile money grew out of the trade in phone card airtime as a substitute for cash in Africa. This retail stand is in Uganda.

Mobile money grew out of the trade in phone card airtime
as a substitute for cash in Africa. This retail stand is in Uganda

“Anthropologist Deborah James showed how folks went into a financial tailspin because they found they couldn’t negotiate with the bank the way they could negotiate with their relatives. With the bank, if you didn’t pay when it was due, they just took it,” he said.

In societies where loans, gifts, and other forms of exchange are central to social cohesion, the “financialization” of transactions can damage more than just the solvency of an individual borrower.

“So there is this big downside, but there’s tremendous upside” in developing new forms of payment, Maurer said. “It’s just that getting to that upside is going to involve doing some work that some of these service providers have not really been willing to do in the past – to really get to know their customers, to really understand what their needs are, what kinds of informal credit arrangements they’re already using, and really actively trying to educate their potential users on how this new service can work together with those things.”

That is where anthropologists come in.

“If you were trained in a business school, you’re going to miss things like familial relations as involving exchanges that are themselves forms of credit,” Maurer said. “You’re going to miss things that happen on timescales that you’re unfamiliar with.”

With his colleagues at UC Irvine, Maurer founded the Institute for Money Technology and Financial Inclusion to bring together social scientists, technology developers, and financial system practitioners from around the world, particularly from developing countries. The institute has set up a regional center in Pakistan and is planning to establish others in Mexico and Senegal. That is because the technology and culture of finance can vary dramatically from place to place.

“We have a researcher who worked on the Russian side of the Mongolian border with former nomadic herders who had only been settled into villages in the past generation,” he said. “They sit at the crossroads of all kinds of physical cash, some of which they don’t know what to do with. So they throw it into the river as an offering to the river god.”

Cultural issues can arise much closer to home. Maurer recently gave a talk to bankruptcy judges in Orange County, California, near where he teaches. They told him about recent Southeast Asian immigrants whose ideas of communal or familial property can put them at odds with a legal system that sees ownership as an individual responsibility.

“I had one judge tell me that she had a back-and-forth with a guy facing bankruptcy where she was saying, ‘You don’t understand, this is how American law works’ and he was saying, ‘No, no, you don’t understand, this is how gifts work,’” he said.

Maurer sees meeting with practitioners as an important part of his work. “I think that we have a fundamental duty to be willing to speak to people about what we’re doing and the insights that we have to offer,” he said. “Too often I think, especially in anthropology, we adopt this role of cultural critic, which means we come with a holier-than-thou perspective on everything. When we deal with people outside academia, doing work that touches on our own, we either get judgmental toward them or we think of them as data.

“But there’s a hunger out there for the kind of insights we have to offer, especially for people in the trenches who are really seeing what’s going on.”

Read the original interview here: bit.ly/2piOL

Funny Money Roundup 2

Another roundup of funny money, courtesy of IMTFI research assistant Taylor Nelms:

• I’m currently doing research in Quito, Ecuador, and after being mugged on a previous trip, I started putting a folded $20 or $10 bill in my shoe to have a bit of cash for a taxi if it happens again.

Now I know what to call it. Learn about the history of “mad money.” (h/t Eva)