Eventually currency in the form of coins and paper will be completely replaced by electronic systems of transferring money.” To what extent is this true and what will be the advantages and disadvantages?

1. Eventually currency in the form of coins and paper
will be completely replaced by electronic systems of
transferring money.” To what extent is this true and
what will be the advantages and disadvantages?
Bandana

2. Are we entering cashless society?..... How True is it?
 Explosive growth in the use of smartphones and other mobile devices, combined with the convenience, security,
and other affordances of mobile payments systems, makes electronic transfer an obvious choice to replace
traditional modes of payment in day-to-day commerce
 Virtual currencies will continue to be used as complementary money in closed-loop systems
 We use online transfer and transaction methods like Paytm, Phonepe, Credit cards, Debit cards etc. for easy
online commerce
 Paper money and metal coins have long been used as a medium of exchange and a standard of value in almost all
societies. Thus, the traditional monetary system has a cultural, historical and social background which are
slightly difficult to supersede
 Virtual currencies like Bitcoin has also been in a trend which is a form of cashless transaction done anonymously

3. Advantages of Cashless Transfer
 As we know the idea of a completely cashless economy is growing in popularity as research confirms the drawbacks
of paper currency and technology provides a safer way forward
 The argument is simple: Cash is an untraceable means of exchange that enables (and encourages) a vast criminal
economy like illegal transactions (drug trade, for example) typically take place with cash so that there’s no record of
the transaction
 According to statistics, after comparing areas that transitioned to debit cards with those that still provided cash
benefits, they found moving away from cash was associated with a roughly 10% drop in the total crime rate
 “An end to cash would mean that every financial transaction is exposed to a third party,” making everyone’s
spending history searchable by authorities and available to banks. This will also reduce corruption significantly and
end black markets
 There would be no scope for cash management
 When we visit a foreign country, we may need to buy local currency. But payments are easy if both nations can
handle cashless transactions

4. Disadvantages of Cashless Transfer
 A cashless society would particularly impact the unbanked community. For poorer people, cashless transactions just
aren’t practical
 Making your payments in the electronic form translates to low privacy. Cash permits someone to spend cash &
receive their money in an anonymous manner
 Hackers are known to rob banks for the payments that are made electronically. In the cashless world, the effects
become even high
 Due to some technical issues like glitches, outrages etc. will lead to problems which leave us without any ability to
purchase things. Even something as simple as a dead phone battery could leave you “penniless
 Electronic payments, it’s easy to swipe, tap, or click without noticing how much you spend. Consumers will need to
renew their efforts to manage to spend
 Once we turn to the cashless society, governments will have a chance to promote the negative interest rates. The
result is that money is going to lose its purchasing power