Should We Get Rid Of Cash? (2024)

FAQs

Should We Get Rid Of Cash? ›

For instance, using cash instead of credit or debit cards may help keep some people from overspending, because you can see how little is left in your wallet after every purchase. In short, getting rid of cash would impose hardships on society's most vulnerable people and could jeopardize our privacy.

If it's been a long time since you pulled out actual dollars and coins to pay for something — here's a conversation for you. It might seem like cash is slowly becoming obsolete. But, Brett Scott says it's a false narrative that we're all pining for a cashless society.

In many ways, cash offers a level of monetary security that a cashless system cannot. Since law enforcement can track digital transactions and/or freeze bank accounts, many criminals—including drug cartels and terrorist organizations—operate in cash. It's an easy way for them to keep their money safe.

The US is moving toward cashless payments, with a substantial increase in the use of mobile wallet apps and contactless cards. A report from the Federal Reserve Bank of San Francisco found that payments made using cash accounted for just 18% of all US payments in 2022.

Physical currency isn't becoming obsolete any time soon, so it's important to weigh up your options before deciding to go fully cashless in 2024. Ensuring you can accept some cashless payments though, is essential to keeping with today's trends and customer expectations.

While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.

Sweden, the first European country to introduce banknotes in 1661, became the world's first cashless society on 24 March 2023. Finland and the UK are top–ranked to become cashless societies as well. Poland, on the other hand, has scrapped plans to limit cash payments to ensure freedom of choice.

“China is one of the top countries for using cashless payment systems, but penetration is not 100%,” says Sara Hsu, an associate professor at the University of Tennessee, specialising in supply chain management. “Elderly Chinese still often prefer to pay with cash and some struggle with using mobile payments.”

10 Years of Decentralizing the Future

Central bank digital currencies (CBDCs) are coming, but a digital dollar is unlikely in the near term, Bank of America (BAC) said in a report on Monday.

A cashless society would rely on a complex network of digital systems, which would be vulnerable to cyberattacks. If these systems were hacked, it could have a devastating impact on the economy.

Is any country 100% cashless? ›

And while no societies are 100% cashless at the moment, some countries, like Sweden and China, appear to be headed that way.

Sweden: World's first cashless society by 2023

It took Sweden 362 years to transition from being the first nation in Europe to adopt banknotes in 1661 to becoming the world's first cashless economy in 2023.

Supporters of cashless transactions also point to greater ease in the everyday management of money, for individuals and businesses. The need to store, protect, withdraw and deposit physical money disappears. International travel would also be more convenient without the exchange of paper currencies.

One widely quoted report predicts that the global transition from cash to digital will reach a tipping-point in 2025, and the pandemic, in which contactless payments surged, has only exacerbated this trend.

So, will we be a cashless society by 2030, if ever? “Cash will likely persist in some countries and economies for decades, much like vinyl records persist in the digital age,” Kresse said.

Commonwealth Bank, ANZ, NAB and Westpac all confirmed on Friday that there are no current plans to go cashless. This comes after Macquarie Bank announced it would phase out cash and cheque services across all its banking and wealth management products from January to November 2024.

Cash plainly has many upsides, especially in an era where digital payments have become the norm: it's convenient, offers privacy and protection against identity theft or mass-hacks (it doesn't leave a digital trail), and is accepted almost universally.

U.S. President Joe Biden ordered officials to look into a digital dollar in 2022 but it has become a divisive political issue with Biden's Republican rival in this year's U.S. election race, Donald Trump, vowing not to allow it.

But it is unlikely that there will be any major shift soon. The US economy is not only the largest economy in the world but is also diversified, dynamic, innovative and relatively flexible. While its share of global GDP has fallen, this is due to rising shares of emerging markets.

The future of money is expected to be heavily influenced by technology. Predictions include the rise of cashless societies, the growth of cryptocurrencies, the continued adoption of digital currencies, and the potential offering of a Central Bank Digital Currency (CBDC) by governments.