Who Wins in a War on Cash?
The big currency reclamation conducted by the Indian government last Fall was only the highest-profile salvo in a worldwide “war on cash.” Cash remains king around the world, with over 80% of all transactions involving hard cash. The remaining percentage involved a mix of credit cards, digital tools like iPay and PayPal, and cryptocurrencies like BitCoin and Ripple’s currency.
The war is driven by people seeking to shine light into the dark worlds of organized crime and terrorism, much of which is funded by cash because of its complete anonymity and portability. ($1 million in “Benjamins” fits nicely in a briefcase.)
As the Money Project points out in a recently posted infographic, conducting a war on cash has collateral damage among innocent civilians. The experience in India provided a dramatic example, but removing cash from any society that is not prepared to fully support non-cash transactions at every level of the economy will have negative consequences.
At Smart Token Chain, we are naturally in the business of creating the tools that would make a cashless society work better.
• Lower costs to allow profitable micro-transactions are one critical goal of blockchain development and back-end automation.
• Simplifying the customer interfaces so that phones need only have texting capabilities is another necessary component.
• And having ubiquitous cash points that can be run solely on a smartphone (limiting the needs for physical investments in network systems) is a third goal that could unlock value and bring transparent transaction tracking to all corners of the Earth.
We are a long way from eradicating the financial rivers that support global crime and terrorism, but the direction we need to go is pretty clear, especially if we truly learn the lessons to be taken from the almost-disastrous Indian currency experiment. That isn’t a given, but should be!
If you have a fintech startup, how are you impacting or influencing this “war on cash?” Is this trend central or peripheral to your business plan?