Are We Close to a Cashless Society?

The war on cash will impact the lives of every single man, woman and child on the planet; unfortunately, it doesn’t get nearly as much attention as it should.

Following are some important developments over the last couple of months that highlight the fact that the world is steadily heading towards the day when using bills and coins will be a thing of the past.

Efforts by Private Companies

Visa recently announced that it would give a $10,000 bonus to any business establishment that agrees to refuse cash transactions in the future. MasterCard noticed its rival’s actions, and has also been encouraging businesses it works with to avoid cash transactions. 

Internet-based companies are also pushing for a world that is as cashless as possible, which is not surprising given the fact that people are likely to spend more money than they would have otherwise when they are not parting with physical coins and bills. Amazon, Apple, Facebook and Google have been at the forefront of this effort.

At the same time, a host of relatively new companies are creating mobile credit card readers and even mobile phone systems that can transfer money in the most remote locations without the need for internet access. While these companies may not hold the power that large corporations possess, they are steadily moving the world away from physical cash by making it easier than ever to make and accept digital payments.

Government Enforcement

Government anti-cash policies are sweeping the globe.

Just last year, Indian Prime Minister Narendra Modi wreaked havoc on his country’s economy by abruptly declaring that ₹500 bills (the equivalent of less than USD$8.00) would be useless as legal tender. However, the disastrous results have not stopped more developed nations from attempting to follow in his footsteps.

The Australian Government is reviewing the use of its $100 note and may require its people to exchange it in the future for new notes. The European Commission, which scrapped the €500 note last year, now wants to limit the amount of hard cash its citizens can carry around.

Perhaps the most disturbing anti-cash policy recommendations are coming out of Australia. Some measures the government is considering include setting a cash payment limit, offering tax incentives for businesses that won’t accept cash, and requiring employers to pay employees digitally instead of with cash.

However, an even more dangerous development is unfolding in the EU. Estonia, which currently holds the EU’s rotating presidency, has issued a proposal backed by Germany to allow national regulators to stop people from withdrawing their own money from a bank in order to prevent a bank run. While the proposal has naturally received little media attention, it does make it abundantly clear that cash that is not in a person’s pocket does not really belong to him or her as it may very well not be accessible when it is needed most.

Why the Lack of Interest?

Another disturbing development in the war on cash is that so few people realize what it means or how important it is. A recent survey found that over a third of all Europeans and nearly 40% of all Americans would not mind going totally cashless. What is more, central banks across the world don’t seem to be showing much interest in retaining their authority as the issuers of national money. In the case of the United States, even the seemingly all-powerful Federal Reserve has been openly questioned over its authority to negotiate rules related to financial stability.

Thankfully, there is still time before the use of bills and coins become obsolete. Germany, Romania, and Bulgaria continue to use cash on a very regular basis, defying all attempts to move into the world where digital currency reigns supreme. The United States has stood strong against efforts to remove the $100 bill from use, even though so-called economic experts have been calling for the demise of the $100 note for a number of years.

Despite these holdouts, the war on cash is progressing all the same. Technological developments, coupled by powerful corporate and government actions, are contributing to a worldwide decline in the use of cash that is almost certain to be followed by a removal of coins and bills at some point in the future.

Regards,

Ethan Warrick
Editor
Wealth Authority


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