Cash is here to stay

Everyone says the CASH is going to disappear. Can cash really disappear?
10 Apr 2017
Everyone says the CASH is going to disappear. Can cash really disappear?

Cash will not disappear.

The Wall Street Journal explains this as follows: A few days after the introduction of the new 50 euro banknote by the ECB, echoes are turned against and in favor of CASH, the legal money circulating in coins and banknotes. The new 50 euro ticket is part of European anti-fraud policies. In the current context where electronic money redraws the map of virtual transactions, Cash reappears as a habitual suspect in the fight against tax evasion. The truth is that this reputation is backed by decades of illegal activities from the mafia, gangsters, and others. As an inescapable cliche we would point to Al Capone and its illegal sale of alcohol in the early twentieth century, with a network of implicated companies. Nowadays cash is still related to fraud.

If we listen to alarmist voices, all those who use cash are delinquents or tax evaders. Electronic money born to respond to a need for fast and secure payment appears as a good ally in the fight against tax evasion.

Digital money is synonymous with modernization and technological advancement, but the risks posed since years are considerable. Digital and encrypted money challenge conventional monetary systems as well as taxation. For example in the payment by bitcoin as for a P2P connection where the exchange of data is established between 2 users anonymously, an encrypted transaction is carried out without possibility of knowing waht is being carried out, until it is declared. Payments via mobile and other services like the newly released Amazon Pay can be without an exhaustive fiscal control, another gap in the tax collection. It should also be noted that online transactions are the preferred target of hackers. In accepting and controlling these new payment modalities, it is necessary security policies by central banks and government with a guarantee of transparency and impartiality. And this requires a time. Digital money can be a victory in the fight against tax evasion for governments. Another victory in the establishment of policies without limits would be for banks. Thus the challenges posed to governments and IMF by virtual money entail a fair and rigorous adaptation without dependence on abusive policies. The priority must be transparency and security for all actors in the economy. If Cash disappeared, the micro economy could be harmed by the interests of financial institutions that currently establish their fees and commissions (payments by mobile phone, bitcoins, and other digital transaction services). Small local producers, local businesses and the most disadvantaged sections of society could be subjected to practices that have little to do with the promotion of the local economy. As for savings last year, they could be affected by increasingly lower interest rates. Cash in safes is free of fluctuations in rates of return. In our article about gold we referred to this tendency to go back to safes to save cash as well as the tendency to invest in on gold.

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The fact is that nowdays CASH in the world accounts for 85% of transactions. In spite of Sweden and its irreversible policy towards virtualisation of money where everything can be paid digitally





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