Only an academic could write “..cash is favored by criminals because of its real-time clearing of transactions..”, but we know what they mean.
Haohan Ren of the School of Management at the Fudan University (et al.) examined a dataset of 165m bank cards used in 222-cities in China to see if late night activity would reveal anything about coincident levels of crime. It does, and the relationship is startling.
The work was helped by several exogenous events or conditions that allowed the researchers to look at their data in light of before/after and with/without conditions. These were/are:
- It was possible to look at cities and divide them into places with more police and CCTV cameras per capita and less. Unsurprisingly, at least for law-and-order advocates, more cops and CCTV appeared to result in lower levels of crime compared to cities less well endowed.
- The government initiated several ‘anti-gang’ campaigns in 2018 and 2019. As these rolled through selective cities it was possible to analyze criminal patterns. Cities hit by a campaign provided useful data on cash use versus cities at the same time not affected.
- Anti-Drug days. The government has instituted June 26th each year as ‘Anti-Drug Day’ and events to educate the public and highlight the danger or narcotics. have a big effect at that time on drug use. Thus cash use patterns at these times are also valuable for the analysis.
The work shows a clear link between criminal activity and late night cash withdrawals. Moreover, this pattern intensified after China banned the use of cryptocurrencies.
So what to do with this information? A key conclusion, which perhaps only a researcher based in Mainland China could write, was “..trials such as limiting the amount of cash that can be withdrawn or verifying the identity of cash withdrawers at night may also help reduce cash-intensive crimes.”
Which makes sense and may be a response acceptable to China’s citizenry. However, I sense even the law-and-order crowd in most Western countries would find such arrangements hard to adopt.
You can read the paper in full via the following link Cash in the Darkness.
Happy Sunday