Are We on the Verge of a Cashless Society?
The idea of cashless society has been discussed for decades. But the movement toward a true cashless society has finally arrived. The physical money you hold in your hand is starting to disappear. Whether that’s a good thing or not is open for debate.
Some argue that a cashless society would mean losing economic privacy. No one can trace what you buy with cash, but there’s an electronic trail when you use debit cards and credit cards. There are fears that a cashless society would mean your every transaction is tracked by the government.
That is, until decentralized cryptocurrencies like Bitcoin became part of the conversation. Blockchain technology that underlies cryptocurrencies fixes almost all of the issues of a cashless society. Because there’s no direct connected to a user’s wallet address and their identity, all transactions are anonymous.
For governments and central banks, a cashless society would save cash. It costs a lot of money to make a physical currency; there’s paper, raw materials, labour etc. Instead of creating their own national cryptocurrencies, some countries are looking at using Bitcoin.
The downside is everyone would need to create an online wallet and have access to a computer or mobile device to conduct a transaction. But these are challenges, it seems, more progressive countries are willing to tackle.
Sweden is taking huge steps to becoming a cashless society. Already, 900 of Sweden’s 1,600 banks no longer accept cash deposits or keep cash on hand in the branches.1 Instead, Sweden is looking at making Bitcoin its official currency. It’s almost there. In 2016, just one percent of the value of all payments were made using cash.2
Denmark’s government has stated its goal to become a cashless society. Meanwhile, Norway’s biggest bank, DNB ASA, called for the country to stop using cash. The Bank of England’s chief economist has said the same thing.
In the summer of 2016, four of the biggest banks in the world (UBS Group AG, Deutsche Bank AG, Banco Santander, S.A., and BNY Mellon Corporation) teamed up to develop a new form of digital cash they believe will become the global, industry standard.3 The banks were aiming for a commercial launch of the blockchain technology in 2018.
Australia is also among the most advanced countries in the world looking to ditch cash in favour of digital currency. The New Payments Platform, which is supported by the Reserve Bank of Australia, and 12 other founding financially institutions, will make secure, cheap, instantaneous payments a reality. It’s already live for those who work at the participating financial institutions and is expected to roll out to the rest of the country. Some say Australia could be cashless by 2020.4
Conditions for a cashless society in Canada and the U.S. are also ripe. According to one study, Canada is the most advanced country in the world when it comes to cashless payments, edging out Sweden and the U.K.
No country relies on plastic as much as Canada, with more than two credit cards per person. When it comes to actual digital payments, Sweden comes out on top; there, 59% of all payments are non-cash compared to 57% in Canada.5
When it comes to the top 100 cities worldwide, Toronto and Ottawa are digital leaders in the payments field.
The fact is, there is a lot of upside for consumers, businesses, and governments to use digital currency. Right now, it’s just a question of when, not if, we move to a cashless society.
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The move to a cashless society will change the way we shop, travel, and live. Businesses and consumers save time, and cash-based crime would be a thing of the past. Studies also show that cites that switch to digital payments would be three percent larger than if they hadn’t. When it comes to the move toward a cashless society and investing opportunities the professional traders at Learn-To-Trade.com can help.
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- “Sweden Chooses Bitcoin In Their Cashless Society Movement,” CryptoCoin Mastery, October 8, 2017; https://cryptocoinmastery.com/sweden-first-cashless-society-chose-bitcoin.
- Savage, M. “Why Sweden is close to becoming a cashless economy,” BBC, September 12, 2017; http://www.bbc.com/news/business-41095004.
- “Big banks plan to coin new digital currency,” Financial Times, August 23, 2018; https://www.ft.com/content/1a962c16-6952-11e6-ae5b-a7cc5dd5a28c.
- Holden, R. “How to make Australia cashless by 2020,” Financial Review, January 14, 2018; http://www.afr.com/opinion/columnists/how-to-make-australia-cashless-by-2020-20180111-h0gngw.
- Tencer, D. “Canada At #1 In Ranking Of World’s Most Cashless Societies,” Huffington Post, November 11, 2017; http://www.huffingtonpost.ca/2017/10/11/canada-at-1-in-ranking-of-worlds-most-cashless-societies_a_23240067.
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