By Sadhbh Hendrick
An EC369 inspired essay. If you know, you know.
What exactly is cash? According to Investopedia, ‘Cash is legal tender - currency or coins – that can be used to exchange goods, debt or services.’ Society has always placed value in trading, be it commodities or otherwise, to gain goods or services not previously in their possession. We have come a long way since barter style trading. As we progressed to exchanging precious metals as a form of money, we eventually saw through the introduction of cash. A practical, portable and durable form of money that allowed for easy transactions, encouraged specialization, the list goes on. As we now consider if it is time to bid farewell to our fond, familiar friend cash, we appreciate the many benefits of coins and notes have provided us with for hundreds of years.
Moving ‘swiftly’ onwards, let’s discuss the alternatives to cash, any disadvantages associated with coins and notes and eventually begin a country by country investigation about the direction of cash’s future. So, my inverted commas around swiftly were not a typo, rather a reference to SWIFT Payment 1, one of the largest financial messaging systems in the world. In a nutshell, SWIFT is one of endless alternatives to cash payments. According to PwC, certain ‘Technological advances and solutions that could change the face of payments if they turn out to be scalable, resource efficient and sustainable’ include: social payments, NFC technology, Bluetooth Low Energy and Blockchain Technology. Fear not, we need not all obtain a degree in computer science or technology simply to buy our messages for the week or the daily newspaper. On the contrary, we daren’t forget our trusty steeds, the debit card and credit card. Electronic payment options that are easily accessible, understandable and widely used. In short, it is important to acknowledge that electronic or online payment does not immediately equate to some sophisticated coding platforms or a new form of trading that’s only understood by the chic 20 something year old hipsters of the world in downtown café’s and eco-friendly, (potentially FBI spyware-rigged, hello, webcams?) apartments. Nonetheless, this dark and scary world of Blockchain Technology does still exist. What is this mysterious technology? Straightforward question; cannot say the same about the answer.
In recent years, Bitcoin has become as big a buzz word as avocado, vegan and vanilla soy latte. But who can precisely recite what this strangely titled new currency is? Peeling it back, what is crypto–currency? Impressively and concisely put by BlockGeeks.com, cryptos are just ‘limited entries in a database no one can change without fulfilling specific conditions.’ So, essentially, just another form of cash, but cash which is active in an entirely different environment – the internet. Blockchain technology provides an appropriate platform for these forms of currency to thrive. And whilst your average Joe Soap may not understand or place any mass on Bitcoin, or one of its rivals, such as Ripple, due to its failure to satisfy all three money functions, there’s no denying the very real fluctuating share prices in these cryptos and the list of very credible firms currently accepting Bitcoin as payment. From Subway to Microsoft and every Bloomberg subscription in between, we simply cannot argue with the facts, this alternative form of payment is showing no signs of slowing down.
Considering further the world of crime, tax evasion, gangland activity and the leading role cash has to play in this more-successful-than-Shakespeare production. Whilst in the initial stages of researching for this article, I posed the question, ‘What is the future of cash?’ to my friends, family members, acquaintances etc. Essentially anyone that would listen to me. I posed the question with bated breath each time in the hope that one of them would present me with a groundbreaking idea or notion, an older, more mature outlook or a fresh, intriguing millennial insight. Unfortunately, this didn’t come to fruition and so crushed were my dreams of becoming the next Miriam O’ Callaghan, you know? One interesting pattern amongst my interviewees, however, was their lack of optimism. The majority told me outright that cash has no future. None. Just like romantic Ireland, it’s ‘dead and gone, it’s with O Leary in the grave’. Naturally, I pressed them for more information. Why? Why is everyone so certain? And the only two answers I received, from upward of 20 people, was the reliance on debit cards and also the eradication of higher denomination notes and the lowest denomination coins.
On a final note, it’s important to summarise and reinforce the conclusion of my evaluation. After examining what exactly cash is and waving hello to its friends or foes trying to ‘Revolut-ionise’ the world of payments, I still believe the future of cash is bright. Cash cannot be totally eradicated without isolating and imposing grave difficulty upon the more vulnerable members of society. Nevertheless, in an age of rapid technology developments and app developer after coding whizz-kid, we must still appreciate and welcome alternatives to cash. The use of cryptocurrencies or elimination of higher denominated notes in a war on crime or struggle against financial crises are not life-threatening to cash. Cash alternatives are not a terminal diagnosis on notes and coins. Rather, a call for necessary action to be taken to accommodate the uses of both cash and alternatives in the diverse and ever-changing world we live in. As proclaimed by UKFinance.org, cash remains king, however its crown is slipping. It is slipping as a result of Dogecoin or Ripple, electronic payments, cards, online banking, and apps such as SWIFT, but nonetheless, it is still only slipping. Much like Michael D. Higgins, cash is here to stay.