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Cybercrime Reinforces Why 'Cash Still Remains An Active And Purposeful Commodity'

Cybercrime Reinforces Why 'Cash Still Remains An Active And Purposeful Commodity'

It may come as a surprise to some that physical cash in circulation continues to rise at exceptional rates in developed countries despite the surge in online and digital payment systems like Paypal Holdings Inc (NASDAQ: PYPL) and Apple Inc. (NASDAQ: AAPL) digital wallet, Apple Pay.

In fact, more than 80 percent of all retail transactions are settled in cash, or approximately 54 percent of total retail transaction value. According to an op-ed by Reuters this trend is unlikely to reverse course.

The op-ed was written by Alfred Rolington, a fellow at the Cambridge Security Initiative and co-founder of Cyber Security Intelligence. He argued that cybercrime attacks isn't the only reason for physical cash to remain a dominant part of business transactions.

Related Link: Goldman Sees FireEye As Potential M&A Target

"It is our view that paper and coin currency still has a very long-term future, and will not, and certainly should not, be made to disappear," the report read. "Cash and coins should not be wholly replaced by electronic currency; although electronic money and digital currency have some benefits in macro-economic and security matters, cash still remains an active and purposeful commodity."

Are Cybersecurity Stocks Less Relevant?

The op-ed is relevant to investors as many cybersecurity bulls argue that the companies are vital to securing and protecting the billions of dollars in virtual currency that is at risk.

For example, analysts at Goldman Sachs cited in a 2014 report the "continued prevalence of APTs and large-scale data breaches and customers' subsequent desire to avoid them via newer technologies" when it upgraded FireEye Inc (NASDAQ: FEYE) stock rating to Buy from Neutral.

Bottom line, investors assuming that the future of commerce will be strictly digital are wrong, at least according to Rolington. As such, the demand for security firms, like FireEye to protect their clients digital businesses may be less than previously expected.

Posted-In: Alfred Rolington Cash Cybersecurity Cybersecurity ThreatsLong Ideas Opinion Tech Trading Ideas Best of Benzinga


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