The future of cash: will it eventually disappear? (2024)

FAQs

The future of cash: will it eventually disappear? ›

Although paper-based currencies are becoming less popular, they will likely stick around for the foreseeable future. Dollars and cents may become harder to use, but as with many obsolete technologies, there are enough users to ensure demand doesn't disappear completely.

Analysis from Barclays Investment Bank, meanwhile, predicts that the global transition from cash to digital payments would reach a tipping point moment in 2025, when absolute cash usage would decline from 41 per cent in 2019 to 20 per cent by 2030.

We have been issuing banknotes for over 300 years and make sure the banknotes we all use are of high quality. While the future demand for cash is uncertain, it is unlikely that cash will die out any time soon.

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.

The downsides of going cashless include less privacy, greater exposure to hacking, technological dependency, magnifying economic inequality, and more. Credit and debit cards, electronic payment apps, mobile payment services, and virtual currencies in use today could pave the way to a fully cashless society.

Summary: Americans are using cash less frequently and making payments more often by credit card or through payment apps. Yet, many CFI customers still like having cash as an option.

Will a U.S. CBDC replace cash or paper currency? The Federal Reserve is committed to ensuring the continued safety and availability of cash and is considering a CBDC as a means to expand safe payment options, not to reduce or replace them.

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.

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.

Is the cashless society really coming? Despite the rapid development of convenient, seamless digital payment methods, the 100 per cent cashless society remains a distant prospect. Cash is a trusted, reliable and essentially secure way to spend, and still adds up when it comes to straightforward everyday budgeting.

What are the dangers of a cashless society? ›

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. Privacy is the third challenge raised. Cash can be exchanged anonymously, leaving no digital trail.

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.

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.

Going cashless can be safer, more convenient and more rewarding. As fewer people use cash in everyday purchases, it's a good idea to start thinking about how cashless payments can work for you and how to maximize those benefits.

New data reveals Australia has lost around half of its ATMs since 2017.

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.

When money becomes less valuable, it's usually due to inflation. Inflation is when the price of things goes up over time which in turn, makes the value of money go down over time. Inflation or the rate of inflation is expressed as a percentage.

Reasons people keep cash at home include emergency preparedness, financial privacy concerns and mistrust of banks. It's a good idea to keep enough cash at home to cover two months' worth of basic necessities, some experts recommend.

Cole Smead, portfolio manager at Smead Capital Management, expects 30% of U.S. lenders to disappear through consolidation over the next decade as many struggle with capital issues and profitability coming out of an era of low-interest rates.