Dirty Money: Banknotes Become Contaminated With COVID-19

While China is sterilizing its currency, investors are increasingly eyeing cryptocurrencies.
Marcia Wendorf

Did you stop at a convenience store this morning for a cup of coffee, and did you pay by cash? That might be a thing of the past if the COVID-19 virus keeps spreading.

The exchange of cash is one of several ways that person-to-person transmission of the virus can occur. According to a recent article in The Journal of Hospital Infection, the COVID-19 virus can remain on surfaces, such as metal, glass or plastic, for up to nine days. These surfaces include door handles, armrests, and electronic devices. You could then become infected with the virus if you touch your mouth, nose or eyes.

According to the Centers for Disease Control and Prevention (CDC), the virus's preferred method of person-to-person transmission is through respiratory droplets, such as those in a cough or sneeze.

Based on previous research on coronaviruses, researchers found that household cleaning products containing 62% to 71% ethanol (alcohol), .5% hydrogen peroxide, or .1% sodium hypochlorite (bleach) were effective in killing the virus.

China moves to clean its cash

It has recently been reported that Chinese banks have been ordered by their government to disinfect cash before putting it back into circulation. An April 2017 study found over 100 different strains of bacteria on dollar bills circulating around New York City. Another study found that 80% of U.S. dollar bills contained traces of the drug cocaine.

Dirty Money: Banknotes Become Contaminated With COVID-19
Chinese yuan bills, Source: Kwun Kau Tam/iStock

In a press conference held on February 15, 2020, Chinese officials announced that banks could only release bills that had been sterilized. Treatments used to sterilize the money include ultraviolet light and heat, and the money will then be held for seven to 14 days before being released.

Cash transfers between China's provinces have been halted, and cash coming from cities having high incidences of the coronavirus is being held by the People’s Bank of China (PBOC).

The PBOC is also working to issue new, uninfected bills, with up to 600 billion yuan ($86 billion) of new banknotes coming. However, there's no way to guarantee that once they're in circulation, the new banknotes won't become vectors for the virus. Consequently, China has stepped up its mobile payment systems, which are already very advanced.

COVID-19 and cryptocurrencies

Does the current worldwide situation lend itself toward a resurgence in cryptocurrencies? The answer is yes. On February 12, 2020, The Guardian newspaper reported that Bitcoin was now trading above the $10,000 (£7,731) mark, a signal that investors are treating it like gold — as a safe-haven asset. Gold is currently trading at a seven-year high.

This is a significant shift from December 2018, when Bitcoin hit a low of $3,196. Bitcoin hit an all-time high in December 2017, when it was trading just shy of $20,000 per coin.

Cryptocurrency initiatives by companies such as Square and Facebook have also lent legitimacy to crypto. Also, futures trading for Bitcoin is now being conducted on the Chicago Mercantile Exchange. This opens it up to purchase by mutual funds, hedge funds, and pension funds.