For some time now, there has been a speculation about what would happen if cash suddenly disappeared. Many predictions have been made about the possibility of a cashless society, but the truth is that such a phenomenon is not about to take place, despite people predicting the demise of money for over 60 years.
Even the presence of cryptocurrencies such as Bitcoin, credit cards and other contactless modes of payments on the internet have had little impact on how we relate to money in its physical form.
The Security Inherent in Physical Money
Money means security – it guarantees a safety net that people find robust and tangible. To eliminate its existence would throw the world into confusion because no one would feel secure and assured of living comfortably. And this is why:
- The presence of real money has been with us for many years and it provides a secure, untraceable mode of payment
- Money is widely accepted everywhere and it is reliable and easy to carry
- Other forms of payment can easily cause panic if the technology fails because of simple reasons like power surges
- The global economic and financial systems would cease to operate and exist
- The absence of banks would lead to massive unemployment globally.
Loss of Financial Standards Would Cause Panic
Physical money as a medium of transaction sets certain standards and if it disappears the confidence people place in the standards established by cash would be eroded.
The comfort and sense of well-being that people feel when they have money in the bank or their wallets would be gone. Cash sets the standards for better living regarding food, shelter, and clothing. The absence of money would confuse people.
On the positive side, the disappearance of money would eliminate crimes, cheating treachery, drug problems and war. Cash provides incentives for people to work hard but if it wasn't there anymore, the world would be a mess. The big question is whether people would go back to the past when goods and services were paid for through bartering. But how would that work on a global scale?
There would probably be a big crisis because nothing substantial would happen. On the other hand, perhaps the world would be a safer place to live in because everyone would be equal without money. Maybe crime would cease to exist. There are many advantages to removing money from the economy, such as eliminating black markets and permitting easier monetary policy.
The Disappearance of Anonymity
Many governments find the use of electronic payments acceptable because all transactions are traceable. Transactions through credit are already traceable and electronic money could bring that lack of anonymity to all the transactions you make. However, using money makes it easy to hide identity.
The availability of all information about electronic payments would make it simple for governments and their agencies like the taxman and the police to identify all fraudulent dealings. The lack of money will make it possible for a treasure trove of our data to be available. Anyone could quickly build the story of our lives from that. We would not have control over some personal information. In short, there would be very little privacy.
For the average person, cashless transactions will not be possible. Without money, many people would indeed suffer, especially the poor who are not banked. Life would also be quite expensive because there are many hidden fees in cashless transactions.