Another Step Towards A Cashless Society In Canada

The currency world is so convoluted that at some point in the future we will be returning to bullion.

@priorpence, the Blockchain is the mechanism that drives BitCoins. People are excited about the technology because it is impossible to alter or modify so it can be used in many ways to make information transfer more efficient. Not too sure what they mean about Canada leading the way since Bitcoin is the pioneer of this technology and virtually all the calculations are done in China. There are many startups using the technology but for currency, Bitcoin has the advantage due to the infrastructure already in place. I can't see the purpose of a new Canadian cryptocurrency when there already a decentralized, independent currency already available.

With Bitcoins, you don't need banks. You can save Bitcoins, invest Bitcoins, transfer bitcoins to anyone instantly. Completely secure, can never be confiscated by a government because no one knows you even have them. It is corruption proof because every transaction is completely public yet completely anonymous. It is immune from inflation because there is a fixed amount and no government can make more. As you can imagine, many governments do not like bitcoin and find it a threat to their power. Same with banks.

Since the USA began producing the big headed Benjamin in 1996, they have produced $2.28576 trillion in $100 banknotes, about half of which are still in circulation. Another $0.15808 billion had production problems. They were trying to find a machine that could sort through the banknotes so they could isolate the bad ones.

The Bank of Canada does not publish production quantities of banknotes, but as of the end of 2015 they are circulating
$75,496.90 million in banknotes.

While the USA has far more $100 banknotes circulating per person, most of these are overseas. Other than that, Canada is circulating almost as many banknotes per person as the USA. It surprises me because Canada makes a big deal out of the desire to reduce the importance of cash.

Number of banknotes per person 
Denomin - Canada- USA - Sweden
$100	11.3	33.6	0.2
$50	 6.6	 5.0	8.7 ~CAD$77 ~US$60
$20	25.8	26.6	2.0 ~CAD$31 ~US$24
$10	 3.6	 5.9	6.4
$5	 6.8	 8.5	1.6

While Swedish banknotes are actually more valuable than USA and Canadian banknotes, I put them in the same column as their closest equivalent. For instance the primary Swedish banknote is actually worth about US$60. Sweden has the smallest amount of cash of any developed nation.

Sweden has never had the equivalent of a ~$20 banknote, but last October one was introduced. The government sees it as a way to wean people off the ~$50 banknote.

In the USA $20 in 1982 has the same buying power as: $49.79 in 2016. So logically you would think that the $50 would be the primary denomination in ATMs. However, that has never happened and probably won't happen in the new few decades.

In Sweden which had no ~$20 banknote, the 100 kroner note is too small for ATMS. So they were used to the 500 kroner banknote ~ $60. They are going in reverse, where by next year the ATMs will now be stocked with 200 kroner banknotes. Most Swedes will find that bothersome, so they will be even more inclined to go to electronic payments.

Sweden also discourages cash purchases by the coin denominations. They have three coins. One is worth about 12 cents, one is worth 60 cents, and the final is worth $1.20 .
By next year the two smaller coins will be invalid, and will be replaced with three coins worth 12,24, & 60 cents apiece.

I think that the USA would discourage cash purchases by stopping production of all coins except dimes and quarters. People would use electronic payments just to avoid round-off.

The advantage of bitcoin is that it is decimal. If it goes too high, you just add a decimal place. Currently it goes down to a millionth of a bitcoin but it could go smaller. All transactions are done by the current currency conversion rate so it is no big deal.

Imagine a world where the different currencies are pegged to the bitcoin. Kind of like a gold standard. Not going to happen in a long time though since governments are not going to give up the control, unless it is a failed government. Imagine if Venezuela finally realizes that what they are doing is not working and decides to use bitcoins. Bitcoins jumped up in price when Greece and Malta had financial troubles since people in those countries looked to bitcoin to get away from government manipulation. No surprise that many governments have already banned it. They can't stop it though.

@ PacoMartin Your analysis is very interesting. Which reminded me of an old news article about Canada's outstanding One Thousand Dollar bills. Where did they go?

In 2012 it was reported almost $1 billion were still outstanding, a favourite of the drug trade.
http://news.nationalpost.com/news/c...minal-elites

I've snipped this from the Bank of Canada's 2015 Annual Report:



Just over $1 million, other denominations no longer issued. That suggests only about 1,000 of the $1,000 bills are now outstanding. From the perspective of Cdn banknote collectors, that's very few.

Thanks PacoMartin for your clarification. I get it, I was confusing millions with billions. So the Cdn banknote total o/s is $75 billion and of that, $1.2 billion are denominations no longer issued. Not a lot of change since 2014 when $820 million in $1000 banknotes were outstanding, with only slightly over $126 million recovered since about year 2012.

Presently still a lot of $1000 bills "out there", appx 800,000 of them.

Many people don't even realize the financial root of many of the ills that plague society. Bitcoin places an unfettered means of exchange back in the hands of the people as it should be, and takes it away from those who sour entire economies to drive their own profits and achieve their own political ends.