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The cashless society has its dangers

Categories : Cash ensures competition among payment instruments, Cash is efficient
December 23, 2016
Tags : Cash substitution, Data breach, Mobile Payments, Technology
Digital money might seem convenient but also has many disadvantages.
Communication Team / Equipo de Comunicación

Cashless shops and restaurants are slowly appearing across developed countries. For some, they are paving the way for a fully digitalised banking system. Nevertheless, it is important to be aware of the risks associated with a cashless society.

First, digital money might seem more convenient than traditional paper money, but it is highly vulnerable to hacking. Indeed, even the most secure banking systems are prone to attacks and several central banks have already been affected. In comparison, banknotes contain a full range of security elements that make them much more difficult to counterfeit than electronic digits. In addition, digital transactions can be traced at any time, which raises the question of data privacy and anonymity.

Besides, the 2008 global financial crisis has demonstrated that a great number of countries are susceptible to go into bankruptcy. In such a situation, people can only rely on the cash that has been taken out of the system before the banks’ collapse.

As risks usually arise when the money is stored only in one place, people should be able to choose between diverse payment instruments and diverse forms of money. It is therefore crucial to keep a balance between real cash and digital money.

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