A World without Cash – A Pro Digital Accounting Perspective
Tags – Cashless Society
We are heading towards a world without cash.
The said notion of cashlessness is especially true for most of the first world countries, while some of the developing countries are not far back either.
At face value, this cashlessness is a sign of a natural transition away from the physical. However, there is a large portion of the society that sees cashlessness as a threat to their freedom of transactions. In all fairness, this feeling of freedom with cash is not true in the first place.
The Illusion of Free
Specifically, the market is allowed to make its own decisions in terms of what is accepted to buy and sell, within legal limits. However, the value of the said money is, to a great extent, centralised in the first place.
We may even argue that money, in itself, only has value because we deem it to have value. Making the cash digital then is just an extension of the deemed value.
A good example here is chess. There are millions of moves possible on a chess board. However, you still cannot make illegal moves and get away with it. There is just enough freedom in chess to allow you to compete.
Here, to provide further context, let’s look at the other dimension of cashlessness too: a time before cash.
From Bartering to Cash
A lot of people seem to forget that there was also a time before cash. In such a world, people simply traded services based on, lo and behold, perceived value. The basics of trading have never changed.
However, most of you may not know that there were factions of societies who were against the idea of having cash. In fact, when Marco Polo went to China in the 13th century and saw people pay with cash instead of livestock or other valuable items, he was truly amazed as shown in his writings from the time. He was especially taken aback by the death penalty for forging money.
In Europe for instance, cash was only introduced when it became harder to acquire precious metals for coins. Interestingly enough, the banks were quick to realise that issuing too much cash will devalue the available amount and inflate the market, true to this day even with digital money.
However, once cash helped in creating a more manageable financial system, the ‘joys’ of cashlessness were quickly forgotten.
(Imagine carrying a goat to get some rice).
However, now the same cash carrying and maintenance has become an issue because there is a more convenient option available – digital money. In addition, think of the issues of theft, and there are some major recurring cases, for instance the Tesco’s report on going cashless and cutting down on armed robberies in their smaller stores, and you start to see the value in going cashless.
In reality, only one group of people truly have a problem with cashlessness.
The Data Paradox
“The government will have access to my data”.
Some people put that line as if it explains everything. Firstly, the relatively harder trackability of cash doesn’t make it impossible to track. Secondly, the problems created through the difficult trackability of cash is precisely the problem. It is facilitating everything from smuggling to paying for drugs. (And, this is coming from a Libertarian).
So, unless you like the feeling of holding cash, and don’t want to let that go, there is little value in sticking to cash.
And, let me throw in an accounting part: it is easier to develop a credit history through digital transactions.
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