The consequences of the pandemic of 2020 were quite tragic, but if we look at the brighter side, this period pushed us to develop new digital systems and progressive ideas. These digital systems included the modes of payment that we use every day now. Since the coronavirus had properties of air-borne diseases, it was kind of impossible to pay cash in hand to people due to the fear of disease transmission and therefore, no contact, digital or cashless transactions became popular during this time. As a result of this, a new world was born where cashless modes of payment were preferred over physical cash exchanges. This evolution definitely moved us to think if we can become a cashless society. But wait, what is a cashless society? Have you thought about it?

1. Is the world destined to
become a cashless society?
The consequences of the pandemic of 2020 were quite tragic, but if
we look at the brighter side, this period pushed us to develop new
digital systems and progressive ideas. These digital systems
included the modes of payment that we use every day now.

2. Since the coronavirus had properties of air-borne diseases, it was
kind of impossible to pay cash in hand to people due to the fear of
disease transmission and therefore, no contact, digital or cashless
transactions became popular during this time. As a result of this, a
new world was born where cashless modes of payment were
preferred over physical cash exchanges. This evolution definitely
moved us to think if we can become a cashless society. But wait,
what is a cashless society? Have you thought about it?
The cashless society
Well, let us give you a picture of the same. A cashless society is one
where physical money, such as coins and banknotes, is no longer
used as a medium of exchange. Instead, people rely on electronic
forms of payment, such as credit cards, debit cards, mobile wallets,
online banking, and digital currencies. In a cashless society, cash
transactions are either rare or non-existent.

3. The idea of a cashless society is surely not new but it is definitely
gaining momentum now. So, what do you think? Is it a good idea to
completely eliminate physical currency from our world? Let us
explore this by looking at the disadvantages and advantages of
becoming a cashless society.
The advantages of a cashless society
One of the main advantages of a cashless society is that it reduces
the risk of crime. Without tangible money to steal, criminals would
have less incentive to rob banks, shops, or individuals. A study by
American and German researchers found that crime in Missouri
dropped by 9.8% as the state replaced cash welfare benefits with
Electronic Benefit Transfer (EBT) cards (source 1). A cashless
society would also make it harder for organized crime to operate, as
they rely on cash transactions to avoid government scrutiny.
Another benefit of a cashless society is that it lowers the transaction
costs and hassles of managing currency. Businesses and individuals

4. would save time and money by not having to handle, store, and
deposit paper money. They would also avoid the risk of losing
money due to theft, fraud, or human error. A cashless society would
also facilitate easier currency exchange while travelling
internationally, as there would be no need to carry or convert cash.
A third benefit of a cashless society is that it helps prevent tax
evasion and money laundering. Self-employed workers who receive
cash payments can underreport their income and avoid paying
taxes. This leads to a loss of revenue for the government and an
unfair advantage for tax evaders. Just like in the UK, where a report
states that the government lost £8bn in tax revenue due to ‘cash in
hand payments’ (source 2). A cashless society would make it easier
for the government to track and collect taxes from all sources of
income. It would also make it harder for criminals to launder
money through cash-intensive businesses or offshore accounts.
The disadvantages of a cashless society

5. Despite these benefits, a cashless society also has some
disadvantages. One of them is that it exposes personal information
to possible data breaches and cyberattacks. Every electronic
transaction leaves a digital trail that can be accessed by hackers,
corporations, or governments. This raises privacy and security
concerns, as sensitive data such as spending habits, location, or
identity could be compromised or misused. A cashless society would
also make people more vulnerable to technical issues or hacker
activity that could disrupt or disable their access to money.
Another drawback of a cashless society is that it creates a
technological learning curve and dependency. Not everyone has the
skills, devices, or internet access to use electronic payments. This
could exclude some segments of the population, such as the elderly,
the poor, or the rural, from participating in the economy. A cashless
society would also make people more reliant on technology and less
prepared for emergencies that could affect their connectivity or
power supply.

6. A third drawback of a cashless society is that it reduces the control
over spending and saving. Take this report for example, “A study
claims that people of the same annual income spend 34% higher
while using mobile wallets than those who used other payment
methods” (source 3). Without a physical reminder of how much
money one has or spends, it could be easier to overspend or incur
debt. A cashless society could also encourage impulse buying and
consumerism, as electronic payments create a psychological
distance between the buyer and the seller. Moreover, a cashless
society could limit the choice and freedom of how people use their
money, as they would have to comply with the rules and fees
imposed by payment providers or regulators.
Conclusion
Now that we have listed all the benefits and drawbacks of the
cashless society, can you think of how it would look if we really
implemented it? Well, some countries are already putting the
cashless society idea to test. Yes, it’s true. For example, Sweden is

7. on its way to become world’s first cashless society and currently
only 2% of the country’s transactions are done in cash (source 4)!
The Swedish economy is surely serving a great example of a cashless
society, but whether the world will follow through is debatable. On
the other hand, there are technological innovations happening in
many areas of finance and that is where we come! At Cogito
Metaverse, we are bringing innovations to the way money and
finance work. We are a virtual country run by the Principality of
Cogito. We offer transaction facilities in digital currencies to all our
registered residents. Our currencies can be used for the purchase
and sale of goods as well as services in the Cogito Metaverse world.
If the idea of a financial innovation excites you and you want to be a
part of the revolutionary future of money, then you must sign up
with us today! Head to Cogito Metaverse and explore a new way to
secure your financial future.
Sources:

8. Source 1
Source 2
Source 3
Source 4