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Living in a World Without Cash

World without cash

We used to say “cash is king”. No longer. Soon, this is a world without cash.

India got our attention recently.  The world’s second largest country announced it was withdrawing 86% of its cash from circulation. A pretty dramatic move in a nation where 98% of consumer spending uses cash. Several reasons have been given for this shift. The main reasons seem to be moving transactions into traceable and taxable form, and leapfrogging its society into the digital age. So far, the change has been challenging. In part, because no one was prepared to handle this surprise move. In part, because India lacks good digital infrastructure.

It got me thinking though, that I am already living largely in a world without cash. In most “western Countries”, only 10-20% of consumer payments use cash. Some countries like Sweden and South Korea have announced plans to get to cashless within five years.

We used to talk about going to the bank to get cash. About “cashing out” at the end of a poker game. We still talk about “running low on cash”, although that’s no longer what we really mean.

How much cash do you carry? Here in Canada, most people carry less than $50. But even then, that’s mostly for those increasingly rare occasions when you need to use it. I used to carry change for parking meters and Tim Horton’s coffee, but even those are now digital transactions.

World without Cash is World without Privacy

There is no place for cash in the Internet of Everything. Anonymous purchases can’t exist, unless you invest in something like Bitcoin which is trying to create an “internet of money”.

For more than 3,000 years, we have used money to make transactions easier. We no longer carry around precious metals or animals to trade. Cash was a human creation based on trust in our institutions. Most currencies used to contain some “fine print” about legal tender and promise to pay and some sort of signature from the national bank. Now many just contain pretty pictures and forgery prevention devices. Soon, those will be gone, as well.

Money has always been real because we believe it is real. Trust is even more important in the cashless cloud. Trouble is, I am not sure who or what will be that source of trust going forwards. This includes trust around value and trust around privacy.

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