Digital money: is a cashless world possible?

By Lídia Concustell

 

Never has it been easier to spend your money. The press of a button, the swipe of a card, or the wave of a phone, and it is done. With the increasing disuse of cash and the growth of digital currencies such as Bitcoin, a large number of questions have been raised: is it possible a society without cash? why digital money has not killed cash yet? what would the advantages be? which impacts would be on financial stability?

This research aims to solve all these questions by discussing the term cashless society as the move towards a world where cash is substituted by its digital equivalent and, therefore, exchanged only in electronic digital form. Since electronic banking became popular in the 90s, digital payment methods have progressively been widespread. PayPal, digital wallet systems, contactless, electronic bills, among others, enjoy nowadays of a general and prevalent use. Moreover, the 2017 United States User Consumer Survey Study states that 75% of respondents preferred a credit or debit card as their payment method while only 11% of respondents preferred cash.

Much has been written about the benefits and blockages to issuing digital money. In the book Before Babylon, Beyond Bitcoin, the author argues totally in favour of a cashless society. He clarifies how technology of money has constantly progressed by appealing to the whole history of money and to his own experiences. Therefore, he states and predicts a future of dematerialised and multiple moneys.

“Euros and dollars don’t fit in the same wallet. There have often been decades between a technology’s invention and its widespread adoption. Nonetheless, in most histories of money, all are made in the same way.” (Before Babylon, Beyond Bitcoin: From Money that We Understand to Money that Understands Us, by David Birch).

Others have quite opposite points of view. One example is the essay Money Talks, in which three experts claim that money is not fungible, and money’s future must not be conceived in technological terms alone. Money is political.

“Drug dealers feel uncomfortable putting “that” money into the church collection plate. All these examples show that the control and regulation of money should not be left to economists and bankers alone.” (Money Talks: Explaining how money really works, by Nina Bandelj, Frederick Wherry and Viviana Zelizer).

Moreover, important press companies have been reporting about this tendency towards money digitalization. The Guardian, The Financial Times, The New Yorker, and even the BBC has its own perspective on this topic.

“In an increasingly cashless world, fewer have a dime to spare.” (The Washington Post, August 6, 2017).

It is true that most countries today are not yet ready to live in a world without cash. And there are many open debates on this topic. However, it is a real and plausible trend as indicated by the statistics. Therefore, in the same way, from my point of view it is totally possible and feasible in the future to reach a cashless world. Governments of countries and banks would enjoy a simplification of the economy and a reduction of costs and, in addition, would enjoy an increase of control. On the other hand, it is true that it can cause certain indeterminate impacts on society, which must be studied with precision.

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3 thoughts on “Digital money: is a cashless world possible?

  1. Dear author, I really enjoyed your contribution. It is a well-based discussion of our current society of “plastic money”. Some comments about the role about the lack of virtuality of the golden reserves and/or the potential risk of “money hackers” in a 100% electronic money world would be interesting. Great job.

    Liked by 1 person

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