Some of the most developed countries in the world are quickly becoming aversive to the use of cash and banknotes in their local economy. They are slow but steady moving towards being cashless societies. Most of these countries can be found in places like Europe and North America.
The reason why cash is quickly declining is due to less demand from merchants, and stricter regulation from the government. The maintenance of a fair market dictates that every transaction and payment be accounted for. When a payment is made in cash, it is very hard to rely on the trustworthiness of the individual to mark it down as income. So, to avoid tax losses for the country as a whole, more digitalized economies needs to be implemented.
Another problem that governments wish to solve is that criminals shall no longer be able to hide their profits from their criminal activities through handling cash.
However, the digitalization of the economy has its setbacks, as more and more funds will be paid in commission to the payment providers than ever before. Therefore the community will need to find alternatives as fast as possible.
The governments have the opportunity to inject blockchain into their payment networks, such as the central banks. This will provide feeless transaction options if the individuals use cryptocurrencies. However, fiat currency transactions could remain the same way there are now.
But is this actually feasible? Which countries would commit to something like this?
The rise of cashless societies: look at Sweden!
Cash is starting to become a rare commodity in Sweden nowadays. The country started favoring online payments long ago, but the real progress started during a shift in 2011. This was due to the local economy making a fast turn towards the digital economy. Now, you can purchase virtually anything with an online transaction or a card swipe. Even individual merchants that sell fruits and veggies in the outdoors accept card payments. They can do so through the use of easy services like iZettle.
As informed by NorskeCasino website, there are individuals in Sweden that voluntarily applied for microchip implants for “making the payment process easier”. Yes, you read that right. There are people in Sweden that have microchips inserted in their hands or fingers. Through these microchips, they can pay for their meal or pretty much anything with a single swipe.
Why is this important for the cryptocurrency industry? Well, multiple blockchain experts have noted that you can do the samething with a cold wallet. You can also implant a cold wallet in a human’s body for daily use on payments.
Similar cases in the U.S.
Similar cases can be found in the United States of America, as fewer and fewer consumers are keeping cash on their hands. A study performed by the US Bank National Association shows that around 54% of all American adults, keep cash on them, simply because it may come in handy. But, when it comes to making payments, 82% of them prefer using a debit card or a credit card instead of cash.
How can the governments react to moves towards cashless societies?
Governments are actually supporting the removal of cash payments from the economy. All across the world, we are seeing the reduction of the maximum cash payments without notice. Banks, eWallets and more are examples of companies doing just that.
Due to such a rapid shift in removing banknotes from the economy, the government can’t really do anything but support it, and they’re doing exactly that.
As already mentioned at the beginning of the article, the implementation of national cryptocurrencies could remove the concerns of most consumers about increased fees from payment providers. Simply subsidizing the payment industry, is enough to move the economy into the digital sphere, and also save extra funds from printing banknotes in the future.
By removing cash from the equation, managing the economy becomes much easier. The country can then maintain a stable issuance of the national currency. Sure, switching to cryptocurrencies in the blink of an eye is improbable. But it is still not entirely unreasonable to believe that the governments eventually will support this development.
Even if they did, the snowball is already rolling and it will only get bigger.