The Diner’s Club introduced the first ever credit card in 1950, subtly ushering in the age of the cashless society. Over time, economists and other experts have predicted that the world would soon abandon physical money for digital currencies. But while many currencies of this kind have entered the economic scene, none have been able to completely replace cash. So, will the world reach a point where it no longer needs cash and, if so, when will this happen?
The Role of Cash in the Economy
Cash Matters explains that it is unlikely that America, or even the world, would completely abandon physical money. This is because, according to the publication, cash plays a crucial role in any economy. It is considered the most secure method of payment, it does not heavily rely on technology, which means it is fast and reliable, and it remains resilient during tough economic periods. Moreover, physical money is free to use and universal – it can usually be converted to other currencies.
Beyond the economy, physical money also holds sentimental and practical value to many consumers. Some claim that it gives them a sense of nationality and more control over their financial matters. Others still maintain that cash affords them privacy in the era of widespread data collection.
Digital Money Versions
Despite the obvious usefulness of physical money, multiple situations over the years have necessitated digital versions. The advent of online gambling as a booming and viable industry made casino games more accessible to players from across the world. But because these players were not walking into physical locations with wads of cash, online real money casinos had to turn to digital currencies.
Many casinos today, as well as other businesses, allow and even reward customers for using digital transaction options to pay for services. These usually include regular cash transacted over digital banking solutions or, more recently, cryptocurrencies like Bitcoin, Ethereum, and Dogecoin.
In line with this, the New York Times reports that central banks from different regions of the bank have been trying out digital versions of their currencies. Think of it as a cryptocurrency that is not unregulated like bitcoin but issued and controlled by the government as it would cash.
Skepticism
As is often the case with new ideas, a fraction of the economic world maintains skepticism over the viability of a cashless society. Chaikin, Sherman, Cammarata & Siegel, P.C partner Allan M. Siegel likens adopting a cashless society to “[taking] a step backward in evolution.” Siegel believes that many people will retain their cash reserves even in a digital currency economy because a cashless society would make physical currency all the more valuable.
Paysafecard CEO Udo Mueller makes even more negative predictions. Per Mueller, a complete lack of cash would worsen the adversities of vulnerable society groups and the high levels of financial exclusion would wreak havoc on the economy. Some consumers also worry that cashless payment solutions are too dependent on technology and could completely paralyze the economy during disasters.
Final Thoughts: Looking into the Future
Some experts like California Title Loans CEO Robert Davidson believe that the age of cashless economy is but two decades away. Davidson believes that most of the money available in the world will be in digital format – either as cryptocurrency or in banks and on credit and debit cards. However, even he is reluctant to posture that the world could ever fully do away with physical currency. This means that we just might never see a fully cashless society – at least not in the near future.
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