Posted 1 year ago | by Ben Armstrong
The World is Moving Toward a Cashless Economy
With governments and industries preparing for the shift to digital cash, there are a lot of questions that need to be answered as people ponder the pros and cons of this new trend.
To learn more about Centralized Bank Digital Currencies and the advances in different countries toward its implementation and adoption, as well as its pros and cons, make sure to watch Bitboy’s last video.
Multiple Countries are Experiencing National Coin Shortages
A cashless society is imminent as users, merchants, and governments realize the benefits of going cashless, especially amid the COVID-19 pandemic
As more news about national change shortage and fears of touching money elevated emerge, governments around the world have started implementing laws and research pondering the implementation of a Centralized Bank Digital Currency (CBDA).
Snopes, a fact-checking site, states a lack of coins is being caused due to fewer coins being produced by the U.S. mint as well as members of the public not being able to visit the places where they typically deposit coins or exchange them for larger cash denominations.
This has caused retailers and supermarkets to issue limits on cash transactions or demand exact change like in the case of convenience stores such as 7-Eleven, Pilot, and Circle K.
The United States is Moving Toward a Digital Dollar
Earlier this year the Bank of International Settlements (BIS) reported that a digital cashless society was on the table back in January by compiling research from more than 50 Central Banks.
The poll undertaken by the BIS indicates that from those banks, “80% are engaging in some sort of work with developing digital fiat currencies, while 40% have progressed from conceptual research to experiments or proofs-of-concept; and another 10% have developed pilot projects.”
On June 30th, 2020, the U.S. Senate Banking Committee held a hearing on the future of the digital dollar, which indicates that the digitization of the U.S. currency is being taken seriously.
Forbes reported some highlights from the hearing as follows:
- Senator Tom Cotton (R-Ark.) stated, “The U.S. needs a digital dollar...The U.S. dollar has to keep earning that place in the global payments system. It has to be better than bitcoin … it has to be better than a digital yuan.”
- Chairman Mike Crapo (R-Idaho) expressed concerns on regulator oversight for stable-coins.
- Charles Cascarilla of Paxos testified advocating for stable-coins, stating that they address the “antiquated plumbing” of our financial system as well as financial inclusion. “Blockchain-based stable-coins allow everyone access”.
- Nakita Cuttino, visiting assistant professor of law at Duke University, discussed the friction in the current payday cycle and the rising demand for costly advanced-payment apps which could be resolved with digital currencies.
- Former CFTC Chairman Chris Giancarlo and head of the Digital Dollar Project, emphasized the “social and national” benefits such as increased speed, lower costs, and issues of financial inclusion.
The United States is Not the Only One Moving toward Digital Money
With the United States setting trends for the rest of the world, which means a cashless society is right around the corner for everyone.
However, the United States is not the frontrunner in this apparent race, with China and the European Union are also in the process of developing their digital currencies.
Cryptocurrency is being leveraged by big government to introduce a digital version of fiat money like in the case of China, which recently rolled out a test of its digital Yuan with numerous restaurants and retail establishments including popular Western restaurant chains like Starbucks, McDonald’s, and Subway.
Although China hasn’t fully rolled out the system, the test run is taking place in at least four cities in China: Shenzhen, Suzhou, Chengdu, and Xi'an, according to China’s central bank which confirmed the test of its new digital Yuan officially.
Sweden has Been Going Cashless for Years
Sweden began the process of going cashless years ago by using financial exclusion, with buses and some other providers of basic and essential services no longer accepting cash.
More than half of the country's banks have stopped allowing customers to withdraw cash or pay in notes and coins over the counter, while shops and other merchants are permitted by law to refuse cash payments.
In 2018, in Sweden, an estimated 4,000 people even went as far as to insert microchips under their skin to have a singular way of accessing their homes, offices, gyms, and even train ticket payments.
Many other countries no longer accepting cash countries have followed suit, starting a bigger trend of an exodus of physical cash to a cashless society.
To learn more about the current state of CBDCs in the United States as well as what this could mean for society and the crypto world, make sure to watch the video if you haven’t already by clicking here or scrolling up.
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