Exploring The Growing List Of Countries Which Indicates That Cash May Become Obsolete

Over 3000 years ago, the world’s first recognizable coins were produced in China. Fast forward to current times and we can see that the size of the Chinese digital economy market is second only to the United States – according to a white paper by the Chinese Academy of Information and Communications Technology. This explains why if you’re going to visit modern China, you’re more likely to see people paying using facial recognition on their smartphones.

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Unsurprisingly, this is a common practice around the world, with the global shift to e-commerce – digital payment solutions are the way of the future. This radical shift in payment is expected to be just the beginning of this monetary revolution.

Between digitization and environmental impacts, coins and banknotes have experienced a decline in demand. It seems that criticism is now no longer king. The change in our global payments system, which includes physical cash as well as mobile wallets, can be attributed to the merger of three powerful industries: telecommunications, retail, and banking. This means that if we see public-private collaboration to take advantage of the latest technologies, we will realize the full potential of a cashless society.

While some countries struggle to adapt to new technologies, others are on track to complete digitization. In this article, we will explore the basics of a cashless society and the countries driving this financial migration.

Are cashless societies the future?

The future of finance is expected to be a ‘digital paradise’. To live in a world where all financial transactions take place via purely asymmetric means – an absolute cashless society.

Anne Boden, founder and CEO of Starling Bank, stated, “Since the advent of the Internet, digital payments have been almost inevitable. Since the introduction of the Bankers Automated Clearinghouse (BACs) system in the 1960s to the present day, digital payments have gained momentum while the use of cash has been in decline. In In just a few decades, digital payments have gone from being rare to standard practice. In fact, for many, the question is no longer whether we should use digital payments, but rather how to make payments faster, better, and more secure.”

Benefits of a cashless society

For those who are tech-savvy (at least to some extent), digital payment means simplicity and convenience. The ease of sending P2P payments or wiretapping your phone greatly trumps having to queue at an ATM or worry about whether you have enough cash. Digital transactions also allow for less room for error, as the exact amount can be paid without having to change. The cost of cash manufacturing is expensive, with cash handling being even more so. Reducing cash production also has significant environmental benefits. According to the American Council on Science and Health, mining and transportation of coins has emitted more than 48,000 tons of carbon dioxide.

The World Economic Forum reported that “cashless technologies can be one of our greatest assets in the fight against corruption and organized crime…Any amounts that appear outside this framework can be immediately identified and investigated. This will narrow the focus to law enforcement officials and forensic accountants, resulting in It makes it easier to target and recover hidden funds.”

What countries are switching?

The transition to an all-digital financial architecture has demonstrated a significant dependence on the country’s ability to keep pace and innovate new technological developments. This is why it should come as no surprise that the top contenders for cashless countries are also technology leaders in their own right.

Sweden, the Netherlands, China, the United Kingdom, and South Korea are some of the best countries that have come close to achieving a virtually cashless society. In fact, Sweden is expected to reach this milestone as early as 2023. If we look at the British pound against the dollar in Sweden, reports say that UK banks may have to hold cash for seniors – following the Swedish model.

Will physical cash become obsolete?

Christine Lagarde, President of the European Central Bank, believes that the answer to this question is no, and said in an interview: “There are countries very close to non-monetary situations. If you look at countries like Sweden, and to a lesser extent the Netherlands, a lot of transactions take place without cash. But it’s not necessarily for everyone’s benefit. You have some elderly people in particular who don’t have any interest in owning cryptocurrency and still want to deal with cash. It’s okay, it has to be available. People should have a choice.”

While a cashless society appears to be the ideal choice for convenience and security, its adoption greatly impacts the population’s access to appropriate technology as well as the ability to understand the knowledge required to use it. This means that nowadays cash occupies a valuable place in most societies, but our dependence on physical currency is drastically diminishing.

last thoughts

If we look at how far we have come, progress shows that a completely cashless global society is highly likely, if not inevitable. However, at the moment, criticism certainly seems to have a place in our current society. But as countries become more technologically savvy, the size of this space will decrease.


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