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The Pandemic Is Pushing Cash Off Its Throne

India’s digital payments per capita have grown more than 5 times since the year 2015, to 22.4 transactions by the end of March 2019.

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Money makes the world go round. It affects our everyday lives in so many ways and comes in a variety of forms, names, and materials. As money has been evolving over centuries, keeping up with the times and technology is crucial. Nowadays, money is more than just coins and banknotes.

The advancement of technology has undoubtedly made life easy. The financial sector is a prime example of the successful application of new technologies as money handling has been made faster, easier, and more efficient. Technological progression proved to be lifesaving amidst the Coronavirus pandemic; the concept of going cashless has become a new norm as the world is encouraged to adhere to the social distancing rules including contactless payments. The new financial solutions brought the adoption of digital currency closer, with bitcoin taking the throne.

India’s emergence as the hub for cashless payments

India is no stranger to cashless payments. The nationwide demonetization a few years ago laid the foundation for widespread adoption of digital payments and wallets. Such a massive change in the system opened doors for many now familiar brands like PayTM, GooglePay, BHIM, UPI, etc. India has also been selected as one of the markets by Facebook-owned WhatsApp to test the capabilities of online payments through the popular messaging app. As per RBI figures, India’s digital payments per capita have grown more than 5 times since the year 2015, to 22.4 transactions by the end of March 2019.

Today, we can realistically imagine a world where no one queues at ATMs to withdraw cash. Due to the on-going pandemic, vendors are increasingly showing a preference for online payments and the use of cryptocurrencies is also growing worldwide. The volume of digital payment across various channels is reported to shoot up as people fear the transmission of the virus via paper handling and exchanging. From paying electricity bills, cab fares to even making a small amount transaction to a local vegetable seller, there has been a major shift amongst consumers. The boom in cashless transactions heralded by the pandemic is the cue to India’s new era of finances.

More people are turning to Bitcoin, the king of the crypto world, to gain financial independence while keeping their assets safe from inflation and other economic factors. Once people feel safe and more familiar with the use of bitcoin, the advantages of the digital currency will shine through. This will lead to further opportunities for people to explore the application of Bitcoin in everyday life and in gaining financial independence.

Entering a new era

Corporations around the world are adapting to the use of cryptocurrencies in everyday lives. Including financial services giants, who see a huge potential in digital currencies as they partner up with numerous Blockchain-based payment providers with the vision of improving the value of digital payments. Adding to this, a popular smartphone provider recently announced a partnership with Gemini, a crypto exchange based in New York allowing the owners of smartphones to purchase or sell cryptocurrencies through their Blockchain wallet. However, not everyone has access to a bank account or a smartphone to use the digital money. Globally, there are billions of people who are underbanked meaning they lack access to traditional financial services and Paxful, a peer-to-peer cryptocurrency marketplace, is here to change that. With over 300 payment methods to choose from, Paxful helps to bring financial inclusion to a large number of people, enabling a new wave of fast and transparent payment services, all while enhancing the convenience and financial security.

Pros & Cons

Innovative crypto collaborations from across industries go beyond the traditional ways of doing business. Cryptocurrency use as a financial medium brings various advantages such as faster, cheaper, and safer transactions, addressing common problems faced by the underbanked. The blockchain technologies behind crypto money offer many benefits but also carry a few risks. The blockchain can be used to securely store important records like medical history, property deeds, confidential information, and so on due to the unbreachable and untraceable nature of blockchain. At the same time, the pseudo-anonymity of such technology also raises concerns that it might be used for money laundering or other illicit activities. It is worth noting that the industry players are working around the clock to address these concerns and eliminate the illegal use of cryptocurrencies.

Is Cash Still King

Going cashless may significantly ease everyone’s life and help curb the flow of black money leading to corruption. The amount spent on printing and transportation of currency will decrease.

The International Monetary Fund (IMF) recently published a video explaining what cryptocurrency is. Besides suggesting that cryptocurrency could “completely change the way we sell, buy, save, invest, and pay our bills,” the video states that it “could be the next step in the evolution of money.”

However, it is important that the move towards a cashless society is informative and inclusive. While the younger generation is tech-savvy, the elderly tend to be less confident with the digital side of transactions and services. In a developing country like India, cashless transactions are catching up at a good pace and with proper education and governmental support, such countries have a chance to form a strong cashless economy.

As money keeps changing and evolving to suit the needs of the modern world, the replacement of the current monetary system seems inevitable. Due to the digital nature of cryptocurrency and its ease of use, cryptocurrency might as well take the throne in the future.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Ray Youssef

CEO, and co-founder of Paxful

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