As a researcher who has lived through Hurricane Helene’s devastating aftermath and witnessed the struggles of my community in Appalachia, I can attest to the importance of preparing for financial meltdowns precipitated by Mother Nature. The futile attempts at using contactless cards, Bitcoin, Venmo, or Cash App during a disaster are a stark reminder that when the power grid goes down, so does our reliance on digital payment rails and fintech infrastructures.
Hurricanes and other natural disasters remind us that our ambitious human efforts to build financial technologies and new forms of digital money can easily be rendered futile. Paying for Uber rides with a contactless card, trading Bitcoin, and using Venmo and Cash App to make purchases can often be a mechanical, effortless exercise. In a disaster zone, however, all of this is vanity. Surviving natural disasters requires citizens to spend money on food, water, and other basic necessities — and doing that without cash on hand is an unexpected and impossible dilemma.
In the event of natural disasters disrupting banks and electrical systems, how do people in affected areas carry out transactions? What measures can communities take to be financially prepared for crises triggered by natural disasters?
As an analyst, I’ve observed that natural disasters not only leave a trail of devastation and emotional turmoil, but they also bring local economies to a standstill. According to data from Pew Research Center, a staggering 72% of Americans reported experiencing extreme weather events in the year 2024. The Federal Emergency Management Agency (FEMA) has confirmed that as of 2024, there have been 81 major disaster declarations made, which is more than double the number recorded two years prior.
One recent disaster — Hurricane Helene — made landfall and flooded remote parts of the Appalachian Mountains, causing “biblical devastation” and record-breaking levels of death and destruction not seen in the region since the historic flood of 1916. The catastrophic aftermath of the Category 4 behemoth left millions of Americans without internet, cell phone service, and electricity, mocking the ubiquitous availability of traditional financial payment rails and fintech digital infrastructures — which all went dark in an instant. Cell phones could not be used to send money to relatives. Computers could not be used to make purchases. No digital device could be charged in electrical outlets. Banks with FedNow instant payment services were closed or flooded.
The area where Hurricane Helene is expected to have its greatest effect, Appalachia, stands out: households in this rural region typically have limited broadband connectivity compared to the rest of the nation. This means they often struggle to access online financial and banking services, a problem that’s exacerbated during severe weather. Consequently, their only option for transactions is cash. In times like these, disaster relief organizations emphasize, cash provides the most flexibility to meet immediate needs. Moreover, the influx of cash, mainly from charitable donations, can help stimulate local economies by funneling money back into businesses and communities as they rebuild.
The financial impact of hurricanes and other natural disasters should be taken just as seriously as the emotional and physical. Experience is the best teacher, and Hurricane Helene has delivered three blunt lessons for every American to consider.
First, preserve the future of cash. Physical cash should never be phased out — a notion contrary to what experts believe will happen to the future of money given the rise in digital payments and popularity of digital currencies. Yet, citizens would be wise to keep some cash savings on hand, while local ATMs should be fully stocked and functional to keep cash dispersions fluid.
2. Improve outdated internet infrastructure: Local governments and public service providers should consider investing in cutting-edge technologies like Starlink, which offers internet via a system of satellites orbiting Earth. This space-based solution mitigates the risk of terrestrial damage during severe storms, as it avoids dependence on cable networks, wires, and fiber optic cables that are commonly affected. Although space presents its own challenges, such as space debris, dust, and atmospheric phenomena, ground-based satellite connectivity offers reliable communication channels in challenging circumstances.
Thirdly, let’s prioritize valuable financial literacy. Financial health encompasses the capacity to cover fundamental living expenses, handle day-to-day finances effectively, withstand financial emergencies, and prepare for future goals. Just as it is crucial to instruct a hurricane survivor on how to secure aid, file insurance claims, and rebuild their financial life, so too is it important to teach individuals about the significance of savings. For advanced investors, it’s wise to safeguard investments by adjusting positions when internet connectivity issues could prevent closing or modifying trades during market volatility.
In recovery phases, people living in regions devoid of physical banks (banking deserts) who don’t have traditional bank accounts may find it beneficial to explore fintech solutions like GreenDot or Vanilla Direct. These companies offer the ability to deposit cash onto prepaid debit cards or digital wallets on mobile devices, which can be used for bill payments and purchases.
Properly preparing local communities allows them to handle potential financial difficulties during emergencies, as traditional financial systems may collapse. The experience of Hurricane Helene serves as a reminder: it’s crucial to enhance internet connectivity, empower individuals with financial literacy, and not forget that cash remains indispensable in times of crisis.
As an analyst, I am proud to have Agnes Gambill West on my radar. This remarkable individual is not only a guest columnist for CryptoMoon but also serves as an associate professor at Appalachian State University and an advisor to attorney startups. Her impressive resume includes a role on the Business and Consumer Payments Advisory Council for the Federal Reserve Bank of Richmond, an advisor to the North Carolina Blockchain Initiative, and an appointment as vice chair of the North Carolina Innovation Council by the lieutenant governor of North Carolina. Before her current roles, Agnes was a proprietary trader on Wall Street, co-founded an Ethereum-based blockchain company, and held a visiting senior research fellow position at the Mercatus Center. Her academic achievements include a JD from the University of North Carolina School of Law, an LLM from Duke University School of Law, and an MSc from Oxford University.
This piece is intended to provide basic knowledge rather than serve as legal or financial guidance. The perspectives, beliefs, and viewpoints shared in this article don’t necessarily align with or represent those held by CryptoMoon.
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2024-10-16 02:08