The global war on cash, initiated by some of the leading economies and governments across the world, is starting to impact financial ecosystems. According to various sources, cash usage in countries including the US, South Korea and Denmark has decreased drastically and is presumed to decline even more in the foreseeable future. As cash continues to devalue, bitcoin is becoming a strong alternative to government-issued money.
Also read: US Slowly Going Cash-Free, But Where’s the Bitcoin?
Denmark Cash Usage Below 20%, Minting E-Krone
The central bank of Denmark, also known as Danmarks Nationalbank, has long considered substituting cash with a blockchain-based currency called E-krone. Using its national currency the Danish krone as basis, the Nationalbank is considering replacing cash with an electronic form of money.
Lars Rohde, the governor of the Danish central bank who oversaw the bank’s cash printing press for years, stated in an interview that cash usage in Denmark already dipped below 20%, He also noted that the rest of the Danish population rely on online banking systems or alternative financial service providers to settle payments and transfer assets. Thus, following the global trend of cash suppression, Rohde is moving forward with the concept of e-krone in 2017.
However, like any centralized digital currencies or assets, e-krone does not make an efficient form of money as it fails to be decentralized. The e-krone providers the Danish central bank with a high level of control, which ultimately would lead to the compromisation of security and privacy.
If Denmark continues to pursue the path of restricting cash and development of digital payment networks, it is likely that bitcoin would emerge as a strong alternative. As Rohde stated, if a digital payment network takes over, cash will no longer the economy as an alternative. It will be substituted and replaced for good.
“Cash and notes are not an alternative to electronic payments. We went beyond that many years ago,” said Rohde.
US Cash Usage to Reach 24% by 2026
The U.S., which houses some of the largest fintech and bitcoin firms in the world, is also seeing a drastic change in payments and financial settlement. Recently, prominent law firm Paul Hastings released a research paper which stated that non-cash payments in the U.S. and U.K. will reach US$46 trillion and $1.75 trillion respectively by 2026.
That means, within the next decade, cash transactions will only account for 24% of all payments in the U.S., with 76% of all transactions being handled with non-cash payment networks and methods.
The analysis of Paul Hastings is based on reliable market data and financial trends, which was conducted in association with the Centre for Economics & Business Research and YouGov.
Optimistically, the growth of the global fintech industry and startups are on par with the declining usage of cash, offering the general population more options to select from apart from banks and traditional financial service providers.
However, Accenture, a multi-billion dollar research firm, recently noted in an article entitled “Global Fintech Investment Growth Continues in 2016 Driven by Europe and Asia” that the U.S. is falling behind Asia and Europe in terms of fintech investment and startup growth, which can be accounted to the government’s inability to present practical regulatory frameworks.
South Korea Mainstream Media & Research Firms Supporting Bitcoin
South Korean mainstream media and leading research firms including Chosun, the largest media network in the country, have conducted various research initiatives to exploit the potential and practicality of a cashless society.
Interestingly, instead of seeking for alternatives like e-money or blockchain-based systems, Chosun and the South Korean mainstream media are optimistic towards bitcoin, which already has established a market cap larger than that of many national currencies. In fact, several analysts and reputable experts led research on bitcoin and the possibility of using bitcoin as an alternative to cash.
South Korea already announced its finalized plans to demonetize coins by the end of 2020. Instead of receiving coins, users would have to enter credit card details to have coins sent to their bank accounts. Bitcoin could make this process easier, more secure and efficient for the general population.
As global cash usage declines, the need for a digital form of payment or store of value such as bitcoin is becoming more obvious. Bitcoin has proved to be the safest and the most secure form of digital store of value since its introduction in 2009 and an increasing number of institutions, individuals and investors are seeing it as the global currency.
What do you think the idea of replacing cash with bitcoin? Ready to bet? Let us know in the comments below.
Images via Accenture, Credit.com
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