Does the Growing Use of Cryptocurrency Mean It’s Time to Say Bye to Cash?

We have been using cash for years ever since it replaced the barter system. With the introduction of ATMs and plastic money it changed how we do business. Although it was announced as the “ only useful innovation in banking ,” by Paul Volcker, former U.S. Federal Reserve Chairman, ATMs are now said to be in danger.
According to Graeme Conradie, founder of
Nomad Community , “Crypto-currencies are here to kick out cash and we might soon be living without cash.”
He further adds, “A lot of transactions are already happening without actual transfer of cash, thanks to online banking and digital platforms. I think people are ready to bid adieu to cash.” Coming from someone who has founded many tech startups, cash is certainly slowly being displaced.
It has been observed that people do not like to carry cash for various reasons. It’s risky and involves tons of hassles. However, alternatives such as PayPal and electronic payments are seen to be safe and quick. These innovations in technology are pushing communities to reduce the use cash.
This is not the first time that a new technology is slowly replacing old technology. Think of VHS, for example, it was first overtaken by CDs and now digital platforms have killed the DVD business as well.
So will cash really disappear anytime soon? It seems like it will eventually happen, but not completely. Cryptocurrencies are the future, and they will definitely replace cash, but a completely cashless tomorrow may not be possible.
This may sound strange to some, but one of the biggest problems with cash is the cost involved in using it. According to a 2016 report , only 11% people preferred to use cash in the US, while others preferred other options including credit cards and electronic payments. However, there seems to be a huge imbalance when you look at global figures.
According to a 2013 survey , 85% of all global transactions involve cash. This is a huge number, but there seems to be a gap as most cash transactions seem to occur in growing countries, such as Egypt and Peru where only 1% transactions are cashless. In Europe a larger portion of transactions are made up of cashless transactions.
Using cash makes you run into several risks. Paper notes and coins may get lost or soiled. Having cash at hand makes it more prone to being stolen by thieves, hence theft poses a major problem.
But that’s not all. Cash loses its value if it is not used. This puts a lot of pressure on the user who has to find ways to prevent this loss from happening. Other than this, there may be cost involved in keeping the cash in a bank or other safe options. All these result in losses to the earner, which is easily one of the biggest problems with the use of cash.
This is also why experts around the globe have advocated for a cashless system. While this is also faced with some opposition, more experts seem to voice the same opinion.
According to a research, the cost of the cash you have largely depends on where you live. This is due to a variety of reasons, such as theft being more common in some countries than others. The time it takes to have access to cash can also add to the cost as ATMs are scarce in some parts of the world.
The prevalent laws in a country can also impact the cost of using cash. For example, one has to pay taxes on the use of cash, and the burden is more when you do not have a bank account. In to this report, those in the US without a bank account pay four times more in fees to access their money, than those with a bank account. One may have to bear the fees charged for different kind of loans such as auto loans and payday loans.
While it is true that a larger number of Americans have a bank account today, one must still consider the 7% that are still without a bank account .
How Can Cryptocurrencies Help?
Cryptocurrencies are quite new, but based on how quickly they are growing, it is safe to say that they’re largely going to impact how we do business. Many countries , such as Sweden, are already said to be close to going completely cashless. However, many countries are still using cash due to its advantages. The ease that cash offers is unmatched as anyone can use it anywhere without the need for a third party.
Cryptocurrency works just like cash but on a digital medium. The cost involved is cheaper and there’s added security. This is specifically great for international and online transactions but many predict that cryptocurrencies will replace cash in the real world as well. Things are changing in the world, but even with that there’s no doubt that cryptocurrency will impact the use of cash, but the notes are definitely not going anywhere.