According to a report from Citbank and Imperial College entitled «The March Towards the Digital Money : Bringing the Unbanked from the Cold» the overall shift towards digital From the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More is slow and patchy. More importantly, it is widening the monetary divide between those who have access to an increasing range of digital forms money and those who remain financially excluded.
While two billion adults do not have an account at a formal financial institution, the report states that “a 10% increase in digital money adoption would allow 220 million people to enter the formal financial sector”. But this can only happen if efforts to promote digital money are geared specifically to those who need it. And this is not the case.
The report measures a Digital Money Index, which ranks 90 countries according to their readiness to adopt digital money, based on government and market support, financial and technology infrastructure, amount of digital options, and the population’s propensity to adopt.
Progress towards digital money has shifted by only 2% since 2014
Progress is slow, very slow. The report finds that since 2014, digital money readiness has increased by 2% worldwide. That is significantly lower than global GDP growth (approximately 2.7% in 2014 and 2015).
The monetary divide is broadening
More worrying than the slow progress, is the fact that the gap between the best performing countries and those at the bottom of the index is widening. The rankings show that the top quartile has seen the average index improve by 3% whereas the bottom quartile has experienced an increase of only 0.5%.
And Money in physical form such as banknotes and coins. More is increasing in many of the best performing countries
The chart opposite lists the 23 best performing countries based on the Digital Money Index. One might expect to see a decline in cash usage in these countries due to substitution by digital money. Far from it.
- Singapore (ranked 1st) has seen the value of banknotes grow by 10.3% per year between 2005 and 2014.
- In the United States ranked 2nd), the value of notes in circulation grew by 6.2% in 2015.
- Six countries in this cluster are part of the euro-zone, where cash is used for over 75% of point-of-sale payments.
- In the UK, the value of notes and coins in circulation grew by 5.6% in 2015 and 6% in 2014.
- Hong Kong has the highest number of banknotes per person in the world.
- In Japan, cash demand has outpaced growth since 2012. 80% of transactions were settled in cash in 2012.
- In Switzerland, year-on-year growth of The value (or number of units) of the banknotes and coins in circulation within an economy. Cash in circulation is included in the M1 monetary aggregate and comprises only the banknotes and coins in circulation outside the Monetary Financial Institutions (MFI), as stated in the consolidated balance sheet of the MFIs, which means that the cash issued and held by the MFIs has been subtracted (“cash reserves”). Cash in circulation does not include the balance of the central bank’s own banknot... More has exceeded 6% since 2014.
- In Australia, the See Central bank. More has opened a new Safe; strong room. A place reinforced with special security measures where high-value objects and documents are safeguarded. In central banks, banknotes and other objects are safeguarded in vaults. More to accommodate the increase in banknotes as the value of notes in circulation in 2016 was the highest in 50 years relative to GDP.
- In Canada, cash in circulation reached 3.8% of GDP in 2015, up from 3.3% in 2008.
- Korea has the highest ATM density in the world with over 2,400 machines per million inhabitants.