Are We On The Verge Of A Cashless Society?

Cash is King
https://cdn2.hubspot.net/hubfs/2752...522935607025

The calendar year 2008 was somewhat of a milestone for US banknotes, in that the number of circulating $100 bills (6.3 billion) caught up with the number of circulating $20 bills.

The subsequent increase in $100 banknotes in the last decade has some people calling for the re-introduction of the $500 banknote, or at the very least the introduction of a $200 banknote to match the Euro Area and Switzerland.

year	$20	$100
2018	9.4	13.4 million notes
2017	9.2	12.5
2016	8.9	11.5
2015	8.6	10.8
2014	8.1	10.1
2013	7.7	 9.2
2012	7.4	 8.6
2011	7.1	 7.8
2010	6.5	 7.0
2009	6.4	 6.6
2008	6.3	 6.3

I Disagree.

Never underestimate the adaptability of the criminal mind.

There are already bad guys who have myriad ways to criminally acquire wealth electronically. If the world went cashless, they would be the benefactors as they are the ones the outlaws and "Cash is King, I do not want to be tracked!" people will turn to for assistance.

There is a rabbit hole you can go down, but I will not link it here...

It's not just "bad guys" that benefit from untraceable store of value. The "Cash in Circulation" of both the USD and EUR has inflated far beyond the transaction needs of the citizens of the currency area. As paper banknotes are used by people outside of the area, they are essentially buying secure paper for goods and services equal in value to the numbers on the paper.

Banknotes and coins in circulation per inhabitant in USD at exchange rate that year
 2018	 2008	1998	1988	1978	Country
$1417	$1168	$726	$470	$326	United Kingdom (3.74%/year)
$1924	$1444	$685	$554	$320	Canada (4.59%/year)
$5238	$2927	$1679	$870	$428	United States (6.46%/year)
$4230	$3324	$1759	$1300	$680	Germany/Euro (4.68%/year)

Over the last 40 years the increase in cash in the UK is much closer to the growth in GDP of the country.

It's often stated that governments would like to be able to trace every transaction for the purposes of tax collection and/or desire for control. In reality governments are very addicted to the profit they make on banknotes.

However, if small countries like Sweden and Norway do away with cash completely, citizens will still use Euro banknotes for transactions they want to be untraceable.

If China ever goes cashless, they will circulate large value banknotes from other countries among the criminal elite.

Sweden's new state-issued digital currency, the e-krona, under development now, should be less vulnerable to attacks — by being independent from global payment systems like Visa and Mastercard.

I realize that "bad people" is a very subjective term. The central bank is basically being funded by banknotes. It's not just the mafia that lives on banknotes, it's one of our primary institutions.

My own personal feeling is that our government now depends on this extra $100 billion from more Benjamins every year. It's a dangerous addiction that eventually will bite us in the butt. I don't want to see "cashless", I just want to see the increase get much closer to zero.

year $100 banknotes in circulation
2018 $1340 billion
2017 $1250
2016 $1150
2015 $1080

We make far more profit from the export of $100 bills than we do from the export of Boeing jets. That's dangerous because people may one day stop taking our pretty paper.

Checks are much more time consuming and subject to fraud than banknotes. Countries usually outlaw checks for years before the stock of banknotes in circulation goes down.

Hand written checks in some sense pre-date banknotes as we know them today.

Until the government started printing gold-backed banknotes, there often weren't not enough coins in circulation to do business properly. Similarly in the United Kingdom, more than 75 percent of the population never handled paper money, which was available mainly in large denominations and used by the upper classes. It wasn't until after World War I that British banknotes became fully backed by securities and thus more widespread.

By the early 1950s, Americans were writing more than 28 million checks a day—that means that nearly one in every six Americans was writing a check daily, or every American wrote one check weekly.The number of annual checks written peaked in 1995, with 49.5 billion.

Germany, Poland, Finland, Sweden, Namibia are some examples of countries that have banned the check.

Checks cost roughly 5x the price of electronic payments. So it is reasonable to believe that only countries that have banned checks will consider reducing the use of banknotes.

I still think the most interesting experiment is in South Korea who will be abolishing coins in a few years. These T-money cards can hold up to US$410.

The two smallest banknotes (worth 82 cents and $4.10) will not be abolished, but their daily use should go down dramatically.

By not immediately threatening the circulation figures for the largest banknote (worth US$41) citizens can still store money in home safes or carry on larger transactions anonymously.