The use of hard currency is slowly diminishing from our everyday lives. If we examine our day to day transactional activities money is primarily exchanged via electronic debit or credit cards. When we purchase clothing at retail stores we use cards, when we fill our vehicles with gas we use gas cards and more and more we are using electronic payment platforms like PayPal to make online transactions. Furthermore, millions of dollars are traded electronically on foreign exchange markets every few minutes. The fact that we are using hard currency less and less is hardly breaking news, but is it possible to imagine a world where hard currency, cold cash or dough is completely obsolete? This article examines the writings of David Wolman in his latest book The End of Money and discusses some of the main points stated in his book in light of current events and news topics.
The Spread of Electronic Currency to Developed and Devloping Countries
In his book David Wolman discusses how we as a globe will eventually reach a point where hard currency is not needed. According to him, money is fast becoming an abstract thing that merely exists on the hard drives of computers. As he explains in one of his chapters, this phenomenon is not only trending in the developed world, but the developing world too. Kenya is a country that has readily adopted mobile banking in an effort to provide financial freedom to Kenya’s citizens living in the most isolated of areas, and removes the need for internet access by landlines or expensive mobile devices such as laptops. Instead of using hard currency, Kenyans use their mobile phones to access their credit, bypassing the need for expensive ATM transactions and banking infrastructure. This form of banking is not limited to Kenya, but is becoming more widespread in other parts of Africa and the world.
Benefits of a World Without Hard Currency
Another argument that David Wolman makes is that soon it will not be financially feasible for governments to produce hard currencies such as notes and coins. Manufacturing hard currency is already an expensive business and in some countries costs as much as 1% of the annual GDP. Hard currency is also the blood of the black market and is used as an anonymous way to conduct illegal transactions. An official inquiry by the UK exchange offices revealed that nine out of every ten €500 issued were used for criminal transactions.
Although cost and the better surveillance of criminal activities are definite benefits to eliminating hard currency altogether, a world without money would also further marginalize the poorest of the poor, who may not have access to the internet and mobile phones, let alone electricity or the knowledge to run applications. However, if these obstacles are overcome a world without hard currency is an entertaining thought, especially when one considers the alternative virtual currencies that are actively being traded today, such as World of Warcraft Gold, e-bucks, Facebook credits and the Linden Dollar (L$) of Second Life.