1.4 CONS OF A CASHLESS FINANCIAL SYSTEM
The aim of this section will be to take the into account the main arguments against the establishment of a cashless society and demonstrate how they are neglectable. Author, advisor and commentator on digital financial services, David Birch has classified these arguments in his book “Before Babylon, Beyond Bitcoin: From money we understand to money that understands us” (London Publishing Partnership: June 2017). They are: conservatism, demographics, seigniorage, security and privacy.
1.4.1 Conservatism
It is argued that every person has an innate sense of conservatism, a risk-averse attitude towards innovations, and anchors himself to traditional value. This is what brings some persons to think there …show more content…
That is because if all payments ought to be electronic then they will all be traceable, and people fear institutions could intrude in their businesses. However, this should be weighed against the advantages it may imply. As already stated in previous sections, the underground economy is the main handler of cash, especially of banknotes of large value, as it is the mean of exchange and store of value which gives them major security and secrecy in their businesses. Therefore, eliminating anonymous means of payment could bring many benefits not only from a fiscal point of view but also from a welfare one. Regardless of this, anonymity is perceived as a key requirement in the creation of a digital currency, or at least that is what transpires from majority of customer surveys. Still it is only an intrinsic perception, which is not really as important as it seems. As a matter of fact, consumers are willing to give up their anonymity in exchange for advantages. As reported by Accenture’s research “Accenture Financial Services 2017 Global Distribution & Marketing Consumer Study: Banking Report” , the first emerging trend among customers is that they are aware of the potential value of their data, so they look at it as a currency. The majority (67%) of customers across many countries are prone to give up their anonymity and share their info with their banks in exchange of more convenient interest rates and other rewards such as monetary benefits or priority services. Therefore, anonymity is not an essential characteristic and electronic cash is not required to have it. Instead, a great compromise is to design an electronic currency that is able to grant privacy, quite different from the former concept. It could be achieved through a well-structured system of pseudonyms so to disclose