"Cash Essentials," a new report by AGIS Consulting, offers an overview and analysis of the debate about cash taking place around the world.

The report, by international payments industry expert Guillaume Lepecq, observes that:

• a senior commercial banker recently stated in Davos that cash probably will have disappeared in 10 years' time;
• the issuing of large-denomination banknotes is being challenged in Europe and in the U.S. — despite protests that this would restrict individual liberties and do little to curb crime;
• many governments in Europe are imposing tight limits on payments made with banknotes, while the U.S. is imposing increasingly strict reporting requirements on banks that accept cash deposits;
• regulators and bankers in Sweden, Norway and Denmark say they are aiming for a "cashless" society;
• a senior British economist has suggested that scrapping cash would allow the central bank to boost the economy by taxing deposits with negative interest rates;
• some e-payment operators advertise their product as the only way to pay efficiently in a modern, digital economy.

However, Lepecq argues, the demand for banknotes and coins has continued to grow at a significant pace around the world, in parallel with electronic payments. He says that there are good reasons for the continued success of cash:

• cash is universal –– it can be used by all and is accepted by all;
• cash generates trust — it is recognized as a secure instrument and one that protects privacy;
• cash is efficient — thanks to constant innovation, cash payments account for the bulk of all transactions and guarantee competition between payment methods;
• cash connects people — it's part of the fabric of society and rooted in the history of civilization.

"At a time of economic uncertainty and volatile markets, it's important to remember that cash has proved to be resilient in times of financial difficulty, such as during recent banking and fiscal crises in the U.S. and Europe," Lepecq said. "Cash is a public good and everyone benefits from it: from the people in developing countries trying to join the financial system to those in more advanced economies looking for a secure payment mechanism and store of value."