I asked the question: What’s a cash machine for if no-one uses cash? in the 1990s. As the guy heading up the strategy for cash machines for a major cash machine company beginning with N and ending in R, it was a good question to ask. Thing is that no-one took the question very seriously as cash machine sales were going through the roof, thanks to the ideas of mini-machines for off-premise cash. Put a cash machine in a bar, restaurant, garage, store … you name it. They were going everywhere.
These days, they’re about as useful as a chocolate teapot. No-one wants cash anymore, and more and more places refuse to even accept it.
Some banks are even charging you to withdraw cash. Times have changed.
The thing is that the war against cash is losing a critical part of society. We are losing our culture. Cash represents culture. It embodies our most representative aspects of our countries, their landmarks and their leaders. Just look at any banknote and you can see this. Something I’ve written about often and, as a notaphilist, something I will miss.
Similarly, the war against cash means that a small part of the population are excluded, as evidenced by this Chinese pensioner who rebelled against the systsm when the store refused to accept his cash payment.
There are still many people who can only use cash and are not digital immigrants. In fact, due to the tightening economy, cash usage in some countries is growing ...
Shoppers increasingly using cash to budget - BBC News
... so, how do we serve the cash-based customer?
More than this, cash is unique and not fungible with digital. For tjhose wondering what I mean by this, is that a card or mobile wallet is not the same as cash. Cash is instant, transparent, anonymous and direct. Cards and wallets are trackable, traceable, subject to fees and delayed. It is very different.
Now, don’t get me wrong. I’m not a luddite here, arguing the benefits of cash. I’m just arguing against the promotion of cards and wallets replacing cash. But then there’s cryptocurrecnies. Crypto can replace cash digitally. This is the dream of the internete community. Just go back to the first line of Satoshi Nakamoto’s 2008 paper describing bitcoin as:
“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”
The whole idea is that you can have digital cash.
You lose that cultural thing about ntaions with their landmarks and leaders and replace them with communities with their interests and intellect. That is the beauty of decentralised currencies. We can all follow and invest in a bitcoin or a doge, rather than a dollar or yuan.
But then this begs a question: what is a dollar or yuan for? What is cash for? What is any of this paper, that governments are now trying to convert to digital for?
I do wonder whether CBDCs – Central Bank Digital Currencies – are the Emperor’s new clothes. You convert a cash currency to a digital currency and it no longer has any of the atrtactions of cash. It is not longer anonymous and direct. It is government monitored and managed. That has far less attraction.
In fact, the likelihood will be that people would use CBDCs for things they don’t care about much; cash where they can, for as long as they can; barter for the places where cash does not work; and crypto for the rest.
Does anyone disagree?
Oh, and btw, what is a cash machine for if no-one uses cash?
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
