There has been a push over the years toward a more cashless society and some fear that perhaps one day it might be a completely cash-free environment all around us. This isn't good news for those who want diversification or competition in currency.
The pandemic saw a dramatic drop in cash transactions as more people were worried about trading with paper money during the time and opt for visa and other payment methods instead. Payment systems have demonstrated on more than one occasion though that they are not immune to disruption.
For those who do not have any cash on hand it can be a tough lesson to learn that it can sometimes pay off to have emergency cash in the event that debit cards stop working, credit cards don't work, banks are closed, ATMs are empty etc. We have seen quick lines at the bank whenever such a scenario unfolds.
The sensitivity of the system supports the notion that it would be dangerous to have such centralization for all payment methods and transactions in society. That isn't the only concern either. There are also those who are unbanked who would have difficulty transitioning as well from a cash environment.
But is cash king? What is cash? Cash is fiat currency. Fiat currency as we know by its design is continually losing purchasing power through inflation and it is an ongoing experiment to see what that is going to look like another 100 years from now. How many fiat currencies will be left standing? They are not immune to failure.
Becoming a cashless society is a bad idea for multiple reasons, as competition and diversification are always best for consumers because it gives them choice. It's a good thing we have alternatives today that are available.
Pics:
pixabay
This is not to be taken as financial advice and is posted for information purposes only.
sources:
https://www.cnbc.com/2020/12/03/covid-19-pandemic-accelerating-the-shift-from-cash-to-digital-payments.html
https://www.cnbc.com/2021/06/25/mobile-payment-app-complaints-are-surging-as-more-americans-go-cashless.html