Will Paper Money Become Obsolete?

It doesn’t take Alan Greenspan to answer this question. Anybody with half an idea about the workings of economics would respond with a resounding, “Yes.” The more specific question to ask, since the transition to a paperless economy has been occurring for many decades, is over what timespan the total transition will occur.

Although it would appear the world is currently filled with a majority of paper currency, electronic and non-paper transactions massively outweigh this figure. Without contemplating the vast daily transactions that happen via the globalised stock markets, just consider how frequently you use your ‘plastic’. Everything from soda machines to McDonalds accepts cards, and for good reason.

Take out the obvious motivation of nations wishing to track the flow of currency for taxation purposes – and it is reasonable to accept the theory that currency was created to facilitate improved taxation – and the move towards a cashless world has many more benefits. Blood money, illegal funding of the drugs trade or terrorist activity are just three good reasons to accelerate the process.

Obviously the total abolition of ‘cash’ will be extensively slowed by the less developed countries (and not surprisingly these are areas most open to abuse by illegal money laundering), however they will be increasingly forced to transition to the pace set by The West.

When you also factor in the explosive revival of barter around the world and the pioneering efforts of such companies as Merchants Barter Exchange (MBE), who have perfected the system of ‘retail barter’ on a massive scale (almost acting as efficiently as cash) the move to a cashless world becomes even more realistic. MBE, acting as a third party record keeper, allows American businesses to trade anything from a bouquet of flowers to forklifts, and $100,000 printing jobs all 100% on barter and without the traditional need for reciprocal trades. MBE has already been approached by countries like India who are keen to implement their system as their global interface for bartering with the rest of the world.

Technology has been the key to the increasing move towards a cash free world. The benefits to the consumer are also apparent: increased protection. VISA backs up most purchases with its guarantee, and many of the others are following suit. What protection does cash afford you? Take the example of a contractor doing a cash job for a home owner. If the work is shoddy, what recourse does the resident have? Even if they win in the small claims court, they are still responsible for collection (over 90% are unsuccessful!) MBE, since it acts like a bank, covers member clients in a similar manner to VISA.

As with all ground-breaking advancements this world has seen, they are only limited by Man’s capacity to accept and implement them. We currently live in a society where you are in the complete minority, if you don’t have ‘plastic’. The scope of this article hasn’t even dipped its toe into the Internet explosion, the amount of cashless traffic that occurs via Ebay, Amazon, PayPal, et al. Let’s face it, apart from being used to having a wallet with paper money in it, do you really need it, and would you really miss it?

Let’s future-scope on that thought just a little, and I’m sorry that it potentially means the loss of many jobs, do we really have the need any more to go to banks? In one fell swoop of stepping fully into the cashless world, we would eliminate the need for the treasury mints, eliminate fraud and laundering, reduce drug trafficking and terrorist funding – perhaps some political funding too! I say, “Roll on the future!”

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