- There is a broad movement to eliminate cash dealings
- People in emerging economies prefer digital currencies
- Use of cryptocurrencies gives the individual greater control over their money
Advances in technology are causing a paradigm shift in the banking industry with those that are taking advantage of the trends becoming immensely successful. As a result, central banks all over the world from Canada to Ireland are exploring the possibility of issuing digital currencies in the future.
Digital payments are becoming the norm
A member of the executive board of the European Central Bank, Benoit Coeure told an IMF-World Bank meeting last week there was an ongoing broad movement in most parts of the world to eliminate the use of printed currency. In a world where only a small percentage of transactions are conducted in cash, only the United States doesn’t seem to join the trend, as more people there write checks than use digital payments. Globally, however, digital Payments are becoming the norm at a stunning pace. Coeure stated:
“We might have to be prepared for a future with a lot more digital money, maybe with cash, maybe substituting for cash.”
According to a report by the South China Morning Post (SCMP), governments and central banks are agreeing on the importance of gradually eliminating cash. They claim the absence of cash could help in reducing crime and terrorism and expedite monetary policy besides helping the global economy. As BR reported recently, the middle class in emerging nations are showing a preference for digital currencies especially in countries where economies are in tatters.
Sweden leading the charge toward a digital currency
As per the SCMP report, Mobile payments in China are on the rise, totalling a whopping $1 trillion in just ten months beginning from January to October 2018, according to figures from the Ministry of Industry and Information Technology, which transactions were mainly reported to be on Alibaba’s Alipay and Tencent’s WeChatPay.
As the Bank for International Settlements studies digital currencies and several global central banks look into the possibilities of releasing central bank digital currencies (CBDC), Sweden is leading in the plans of launching CBDCs with the deputy governor of its central bank stating there is a high chance they will launch the e-krona digital currency within the next five years. Government data from Kenya shows that M-Pesa, a mobile digital payment system is quickly replacing cash with the system having over 31.6 million users in a country whose population is about 50 million people.
The bottom line is that the war on cash is all about control, banks and governments have for ages been able to control the masses while the monetary authorities claim their motive is to reduce crime, terrorism, drug dealing, counterfeiting, etc. The elimination of cash and adoption of cryptocurrencies removes the near-complete control of transactions, interest rates from the government to the individual, as fathomed by the creators of cryptocurrencies.