Monetary policies: in March only $ 1,500 million was withdrawn from banks

Despite attempts, public and private, to advance the digitalization of the economy, in Argentina the use of cash continues to dominate. In March alone, $ 1.5 billion was withdrawn from banks; while savers deposited another $ 1,800 million with the entities,

The data is from an estimate made by private banks affiliated with ADEBA.

where is a difficult technical note Private banks warn that “notes are commonly seen as a symbol and pride of nations, they have a positive connotation” and that the intensive use of money in the country “is negative for the whole of society.”

Among the adverse effects of the proliferation of physical money, entities grouped in ADEBA explained that on the one handin favor of the informal economya. “Cash payments form an informal“ parallel ”system that feeds on itself and stays out of the system,” they warn.

At the same time, they define high costs that result in putting money on the street and destroying bills in poor condition. “During 2020, The costs of materials alone for the financial issue amounted to US $ 118 million. This should add the costs of storage, transportation and destruction of money, “they pointed out to the business room based on data reported by the BCRA itself.

To these expenses, they added that we must add the relating to the receipt, classification, conditioning, storage and transportation of banknotes. “The cost of carrying money is one of the main costs of financial entities,” said the banks, referring not only to the economic aspect of this practice but also to the environmental impact.

Entities calculate that The carbon footprint caused by using cash in Argentina each year is equivalent to having 20,000,000 lamps lit in a day or a car traveling 1,000 times around the Earth.

Exposure to crime and periods of insecurity is another of the consequences of high cash use. But also the lack of financial integration, of both people and companies, who remain forever “out of the system”; what do you seeZ limits the “lending capacity of banks.” “As part of the savings stays outside the banking system, its capacity to generate loans is reduced and this refers to a lower level of bankruptcy,” they pointed out.

Although entities agree that electronic money is better and cheaper than physical money, there are reasons preventing Argentines from stopping using banknotes. On the one hand, high tax pressure.

“Operations conducted within the banking system are covered by a taxes that make the operation more expensive (credits and debits). Conversely, the use of cash does not pay any tax. In this way, society sees that money is cheaper than electronic money, although in reality it is the opposite, ”the Adeba report said.

At the same time, they targeted other taxes, such as Gross Income and VAT among otherswhere banks act as restraining agents, reinforcing the idea of ​​the notion that “digital money is more expensive”. Banks warn that society believes that “withdrawing and depositing cash” is free of cost“, but this reward of withdrawals and deposits provided by a Central regulation makes the activity of financial entities more expensive.

Javier Bolzico, president of ADEBA, stated: “the use of money does more harm to us as a society than we realize; informal, insecurity, financial exclusion and environmental impact are just a few of its effects. And he added: “The government, private sector and society as a whole must work in coordination with the aim of reducing the use of money.”