Cash use is falling at extraordinary rates in economies across the world. Many believe the pandemic may have hastened the trend

Cash use is falling at extraordinary rates in economies across the world. Many believe the pandemic may have hastened the trend.

But are we prepared to do away with paper money altogether?

Tech has made it easier to avoid cash.

3 in 10 Americans said they make no purchases with cash in a typical week, up from a quarter in 2015, according to the Pew Research Center. At the same time, the share who said that all or nearly all purchases are made using cash fell to 18 percent from 24 percent in 2015.

New technology is making it easier to go cashless. When businesses started closing and shelter-in-place rules began taking effect in March 2020, there was a significant migration to online commerce. Merchants who were not previously online quickly transitioned online.


Many had been dismissing it since inception; however, in the last few months, many more are coming to accept that it will be around in the future. Even companies like PayPal, Tesla and Square are starting to accept Bitcoin.

Governments across the world see that well-regulated digital currencies such as Bitcoin can provide significant public benefits in greater efficiency and lower costs for both domestic and international payments systems, while also helping to ensure financial services reach the hundreds of millions of people – especially in developing countries – without bank accounts.

The widespread introduction of digital currencies has the potential to transform the world financial system

Cash is king.

Cash is still the second-most-used form of payment in America today after debit cards.

Physical money has been with us for thousands of years for a reason. Cash is essentially untraceable, it is easy to carry, it is widely accepted and reliable. If the power goes out, or there is a blip in the electronic systems that make the online commerce world go round, cash is there. If someone wants to buy something without anybody tracing it back to her, cash is the way to do it. If someone wants to be certain that their form of payment will be accepted, cash is the best bet. Even with advances in technology, some of the aspects of cash simply are not reproducible with bits just yet.

Cash is essentially untraceable, it is easy to carry, it is widely accepted and reliable.

There is simply no alternative system of payment that is as convenient, reliable, and anonymous.

Bitcoin is anonymous, but currently unstable and inconvenient. Credit and debit cards are widely accepted, but they instantly connect your purchases with your person. Peer-to-peer payment systems like Paypal or Venmo require apps and accounts and are still easily traceable.

Going cashless disadvantages, the unbanked and communities of color. Approximately 6.5% of U.S. households—14.1 million adults and 6.4 million children—are unbanked, according to the FDIC’s 2017 National Survey of Unbanked and Underbanked Households, meaning they live in a household holding no accounts with formal, insured financial institutions.

Another 18.7% of households are underbanked, which means they have at least one account at an insured institution, but they also use financial products or services outside of the banking system, like payday loans or cash-checking services.

“Any move to cashlessness is, by definition, exclusionary to those groups,” Christina Tetreault, senior policy counsel at Consumer Reports, says.

Cash will not die out tomorrow.

Younger generations are adopting digital payment systems faster than their predecessors with 47 percent of Gen Y and Z respondents using mobile payments more than any other payment method, according to an international Paysafe study (compared to 28 percent of Generation X and 10 percent of Baby Boomers). As that generation comes to dominate the economy, that is likely to have an impact on cash usage in the future.

But with ongoing concerns around financial exclusion, security, and resilience, how we deal with this shift is likely to become one of the biggest financial questions in the coming years.

If economies are to harness the benefits of a cash-free society, governments, central banks, and private institutions will need to rally together to extend digital reach to the financially excluded, find solutions to potential privacy concerns, and establish ways to maintain resilience and diversity in the monetary system, all without compromising on security.