The Role of Cash in War

News from Ukraine is grim following Russia’s invasion. It highlights, yet again, the role of cash at times of huge stress.

In Russia and in Ukraine people have turned to cash, with large queues at bank branches and ATMs. The National Bank of Ukraine enacted a temporary cash withdrawal limit of 100,000 Ukrainian hryvnia per day — the equivalent of about $3,339 – and both countries have imposed capital controls.

Yet again, the dreadful situation in the Ukraine raises the question about the usefulness of bank accounts, banking apps, bank cards or cryptocurrencies when power is uncertain, the internet and phone lines are not guaranteed and restrictions limit or even stop cash movements? When the impossible happens, whether natural or manmade, the value and role of cash is clear.

The situation has also thrown into sharp focus the whole issue of sustainability, a topic very close to our industry interests.

With so much of the supply of hydrocarbons concentrated in unstable or unfriendly countries, the case for harnessing renewable energy and becoming more self-sufficient has never been more compelling. As we go to press, there is speculation that Russia will turn off the gas to Europe, on which many countries are largely or wholly reliant; such a move would have dramatic effects on their economies. Even if the gas isn’t turned off, the money flowing into Russia is diluting the impact of the sanctions these same countries have imposed.

Net Zero goals are both noble and necessary to avert irreversible climate change. They also have a strong economic driver, particularly given current events.

There is little we can do to avert major geo-political events such as the current conflict. But we can all do our bit, as an industry and as individuals, in lowering our energy consumption and our impact on the environment to reduce the likelihood of countries and economies being held hostage in future to the needs of fossil fuels.