In general, an asset can be considered money if it is portable, divisible, generally accepted, and inimitable. In an economy, money is a medium of exchange accepted by everyone and used to buy and sell goods and services. In fact, the concept of money has undergone many changes over the years. Today, societies have started to use the digital version of money more often than the physical version, thanks to technological developments. Let’s look at the concept of Cashless Society and how it can be realized in today’s world.
A Cashless Society is a society where physical money is not accepted in any financial transaction. Instead, individuals and businesses transfer money to each other digitally through credit or debit cards, electronic money transfers, cryptocurrencies, or online and mobile payment services such as PayPal and Apple Pay. There is no Cashless Society today, but many economists think that the Cashless Society is not in the distant future. Developments supporting their views continue to occur, and with the development of internet banking services, the need for physical banknotes has begun to decrease. Moreover, governments seeking to benefit from the unique features offered by blockchain technology have already started pilots to launch Central Bank Digital Currencies (CBDC) and use them in cross-border transactions. The digitalization of money makes transactions much faster and safer in the globalizing world.
Impact of Cryptocurrency Ecosystem on Cashless Society
The worldwide adoption of the cryptocurrency market, which has created a large ecosystem for itself since Bitcoin launched in 2009, is increasing day by day. Crypto assets, which have brought a new perspective to the concept of digital money, are not yet used as a means of payment everywhere, but many governments and businesses have already started to integrate payment services with crypto assets. Crypto assets can be used as a means of exchange in daily life as well as a store of value. In El Salvador, where Bitcoin is a legal payment method, citizens can pay daily with Bitcoin. We can think of El Salvador as the closest country to the Cashless Society as there is no way to physically use Bitcoin.
It is also quite common to use stablecoins for daily payments to avoid being affected by the volatility of crypto assets. Stablecoins are cryptocurrencies indexed to the value of another asset. Stablecoins emerged as a result of the high volatility of cryptocurrencies and the need for a stable and familiar store of value for digital asset investors. For more information, you can read stablecoins article.
Created by leveraging the unique features offered by blockchain technology, crypto assets enable private, secure, and immutable transactions. Thanks to these features, daily payments will become both safer and faster. As the adoption and use cases of crypto assets increases, the global transition to the Cashless Society will accelerate.
