Cash Vital for Maintaining Civil Order in the Event of System Failures, Cybersecurity Expert Says

Andy Farnell said that cash should be treated as ‘a necessary part of the machine’ to ensure resilience, with a mandated acceptance of cash as a backup line.
Cash Vital for Maintaining Civil Order in the Event of System Failures, Cybersecurity Expert Says
File photo of £5, £10, £20, and £50 banknotes dated Aug. 20, 2024. Gareth Fuller/PA Wire
Victoria Friedman
Updated:
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Maintaining a sufficient level of cash in circulation and processing is vital for maintaining civil order in the event of a cyber attack or system failure, a cybersecurity expert has said.

Andy Farnell, director of research and education at Boudica Cybersecurity, told The Epoch Times that maintaining cash as a viable payment system enhances societal resilience against cyber threats, because “cash requires no power.”

“It can remain indefinitely in active circulation and be processed by hand and eye,” said Farnell, a computer scientist specialising in signals and systems with 20 years of expertise in the industry.

Farnell said that cash could help serve to undergird confidence in the critical two- to five-day period after an event such as a system outage.

“The ability to self-manage trade through formal or informal cash is vital for civil order,” he said.

Cash ‘Necessary Part of the Machine’

“In the long term, cash may help us through longer periods of uncertainty,” he added.

The cybersecurity specialist explained that in the past, particularly pre-1970s, “economies ran on cash without bound. Anything that has happened is proof that it can happen again.”

He said that while that “would not be desirable by any means,” it would not be impossible for cash to stabilise a medium-term outage lasting many weeks or months.

“However, the challenge is not with longevity but with scale. Electronic banking systems are the only practical way to deal with large sums and huge throughput needed to run a modern economy. Cash is simply a necessary part of the machine,” he said.

Boudica Cybersecurity was one of several entities to submit evidence to the Treasury Committee’s Acceptance of Cash inquiry into whether there is a need to mandate that businesses must accept cash.
The inquiry, launched in November 2024, heard a variety of arguments in favour of government intervention, including from advocates for senior citizens, survivors of economic abuse, and charities supporting those in poverty.

UK’s Neighbours Strengthening Cash

The committee also heard arguments that maintaining strong cash circulation was important during times of crisis, such as power and internet outages and cyber attacks, and that those considerations should also be taken into account.
Some of those experts, including the pressure group the Payment Choice Alliance, had cited several of the UK’s neighbours in Europe, like Sweden, who have turned back on plans to move to an entirely digital currency, in part for security reasons.
A branch of Lloyds Bank in the City of London, on Oct. 20, 2014. (Stefan Rousseau/PA Wire)
A branch of Lloyds Bank in the City of London, on Oct. 20, 2014. Stefan Rousseau/PA Wire
In March 2024, Sweden’s central bank Sveriges Riksbank issued a statement saying that more measures were needed to protect cash and there should be legislation in place to guarantee all merchants accept it.
In November, the Scandinavian country also issued in its emergency guidance in case of war that Swedes should maintain a variety of payment methods at their disposal, including having enough cash to cover at least one week’s worth of expenses.
Norway and Finland have similarly advised their citizens to keep a store of cash in case of power cuts or other system failures.

CrowdStrike

Cash advocates have also pointed to non-hack related cyber incidents such as the CrowdStrike outage last summer—which affected aviation, banking, and health care services—as reasons to maintain a healthy circulation of cash.

Farnell said that CrowdStrike taught us the dangers of relying on dominant suppliers and monopolies.

“Do not trust in single systems with single points of weakness,” he said.

Farnell calls for a balance of technologies to maintain a secure payments ecosystem.

“Digital innovation does not require the destruction of extant, proven technology. The new must be overlaid on top. Robust technology is hybrid, plural, compatible, and built on diverse interoperability,” he said.

“Integrate cash and digital systems. No split, separate systems,” he added.

Indeed, some systems that are working to protect cash are still innovating. Sweden’s Riksbank said that while it wants cash protected, it is also still developing the e-krona, a central bank digital currency (CBDC).

The Bank of England is also progressing in its exploration of a CBDC, the digital pound. The bank has said that if a CBDC were to be introduced, it would complement the cash system and “would not replace cash.”

Mandating Cash Acceptance ‘Seems Wise’

Asked whether he thought cash was being maintained at a sufficient level to act as a reliable buffer when digital systems are down, Farnell said, “Yes, in circulation.”

But he continued, “Not in processing.”

“Bank branch closures and disappearance of physical [point of sale] ’tills’ is a worry,” he said.

A banking hub in Axminster, Devon, England, on May 26, 2024. (Victoria Shaw/PA Wire)
A banking hub in Axminster, Devon, England, on May 26, 2024. Victoria Shaw/PA Wire
Consumer advocacy group Which? has been tracking bank branch closures and said last month that since January 2015, 6,266 branches have closed, a rate of around 53 a month, or nearly two a day.

Following pressure from the government and cash advocacy groups, major banks have agreed to fund community shared banking hubs, to ensure continued access for people and businesses.

The government has committed to working with industry to open 350 such banking hubs by the end of this Parliament in 2029.

Farnell said, “We must ensure a basic level of habitual capability, recognition, and social acceptance of cash as a common financial tool.”

“Resilience must be built-in as a latent mindset and so a mandated acceptance of cash as a backup line seems wise,” he said.

No Plans to Regulate Cash Acceptance

In January, the Economic Secretary to the Treasury Emma Reynolds told the Treasury Committee that the government has “no plans to regulate businesses to compel them to accept cash, big or small.”

“Businesses should have the flexibility to offer the choice in payments that they think their customers need, and we are not minded or we don’t have any plans to regulate to force businesses to accept cash,” Reynolds said.

She stressed that the government’s payments vision must be “fit for the future,” with innovation and technology central to it, but that the government remains committed to the access to cash regime, through its promise to support banking hubs.

The Treasury Committee inquiry into cash acceptance is ongoing.