cash-still-king

The idea of a cashless society is far from being a foreign concept.  Cash/payment apps like Google Pay/Send (previously Google Wallet) have been around for a decade and debit cards even longer – but the possibility of going completely cashless really began to hit the mainstream as a result of the pandemic. While contactless payments and decentralized banking promise to be the wave of the future, where does that leave cash, and more importantly what’s the value of cash in our increasingly digital-first world? 

Going Cashless 

Photo by Jonas Leupe on Unsplash

On a very personal note, going cashless isn’t that big of a stretch for myself or my family. On any given day I will leave the house without a single piece of fiat currency in my pocket. With the ubiquity of Apple Pay in conjunction with my habit of always wearing my Apple Watch, chances are I can do anything from buying lunch to pumping gas without the need of even my debit cards. Living in a major metropolitan city only makes the transition easier – there are several systems that are designed for my convenience.  

That’s just the start of it. From being able to accept payments – through apps like Venmo or through my bank via direct deposit or Zelle – to pay all my bills online, technology has made a cashless society very real. Each of these transactions is cataloged and recorded making everything from disputes to proof-of-payment a matter of pulling an individual’s records.  

Impact of COVID-19 

To say that COVID-19 had an impact on the adoption of digital currency is putting it mildly. The truth is that the pandemic was a huge incentive for many, including businesses and municipalities to quickly build out the infrastructure needed to allow for contactless payments and even alternative forms of payment like cryptocurrency. As the pandemic continued to drag on over 2 years, it became evident that contactless payment systems and cash alternatives were quickly trumping the importance of cash in our lives. 

Decentralized but Not Equal 

At the beginning of this post, I noted that cashless and cash alternative modes of payment were an easy enough transition for me and mine. That said, the “benefits” of going cashless don’t apply evenly to all. While many DeFi companies like to boast about their ability to bring financial instruments (read: accounts) to the “unbanked”, this doesn’t quite track. For starters, many unbanked or underbanked individuals don’t have access to some of the basic requirements needed to access these tools (like an employer with direct deposit). Immigrants, for example, are more likely to find themselves locked out of the DeFi revolution and traditional banking alike. It’s a significant problem that required cities, like New York, to outright ban cashless only policies. 

On the cash alternative side of the equation, while Bitcoin may have seen its value soar in the last few years there are still not enough away-from-the-keyboard retailers that will accept it as a form of payment. Market volatility and (locally) the SEC’s lack of guidance on cryptocurrencies will continue to delay any meaningful adoption of crypto as payment for time to come.  

Privacy 

Photo by Marija Zaric on Unsplash

With additional oversight, it’s expected that crypto will lose some of its savor from privacy advocates as well. This may simply move interest to different forms of digital currency, but it could also make cash more valuable as means of keeping your personal information private. In an ever-increasing world where our day-to-day purchases can easily be lost in a data leak, cash becomes more an instrument of privacy.  

So is Cash Still King? 

Photo by Igal Ness on Unsplash

The question remains, “Is Cash Still King?” Depending on your stance on several factors, the answer is a hard “maybe.” For those of us who are fortunate enough to have regular employment, access to banking tools, and disposable income for niceties, like smart devices, cash is less important in our day-to-day lives. However, for a much larger section of the world and to some of our most vulnerable in our society, cash remains the easiest and most functional means of payment available. While I would not advocate going all cash or all-digital currency, I recognize the importance that fiat cash will continue to play in our modern society. 

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