After the COVID-19 outbreak, central banks have resorted to quarantining physical bills. South Korea’s central bank, the Bank of Korea, for instance has implemented a quarantine policy for physical notes that come in from local banks. They plan to keep banknotes in a safe for up to two weeks, given “that the [SARS-CoV-2, which causes the COVID-19 disease] virus usually dies in nine days.”
In February, Chinese lenders were asked by the government to both disinfect bills and keep them in a safe for up to 14 days, depending on what region they came from. The Federal Reserve has also begun setting aside US dollar banknotes from Asia for 7-10 days before recirculating them into the economy. The Bank of England has acknowledged that banknotes in circulation can hold “bacteria and viruses” and recommended that people wash their hands after handling money.
Now, a spokesperson of the WHO has reportedly told the media that “people should use contactless [payment] technology where possible”. The COVID-19 outbreak is also likely to accelerate central bank adoption of their own digitized currencies, some run on blockchain solutions. The PBOC, China’s central bank, has looked for some time at replacing physical cash with a digital analog. A Fed official said a real-time digital payments option was “inevitable” and the chief of the Bank for International Settlements also opined that central banks will likely need to soon issue their own digital currencies.
