Abstract

The main aim of this paper is to delve into the present monetary system which chiefly relies on coins
and paper currency and come up with a system that eradicates the disadvantages that are associated
with cash. With the global economy venturing into a time when everything is going cashless even
without knowing, the paper looks at how the purpose of cash and plastic money has reduced in
meaning. Technology is further aiding attaining a cashless economy. Given that cash is associated with a
lot of fraud and negative activities, the paper prefers a cashless economy. The cashless system can be
attained through the adoption of a smart, innovative model that ensures that the exchange of money
does not involve any tangible items. The model will simplify how money is exchanged by getting rid of a
lot of obstacles.

Keywords: Biometric card, Cashless, transaction, exchange rate, central bank, UID

Introduction

We operate in an economy that is ruled by currency and notes which can be comprehended fully by only
a handful of people. There is a common saying which holds that change is the only constant thing.
Change is present in almost everything that surrounds us. Exchange of goods and trade has greatly
evolved from the traditional barter system to the present monetary system. Despite the fact that people
are already moving to a cashless economy, those who hold a lot of power in the society are against the
system due to the fear that power will be decentralised from their hands through the adoption of a
cashless system. However, the idea is likely to gain a lot of support from credit card companies and big
banking institutions.

A central bank or a recognised authority exists in most economies and has the right to manufacture
metal and paper currency and attach value to it. The system may seem easy to understand although
there is a lot that is entailed in the creation of money. The forces of demand and supply regulate the
amount of cash in an economy at any given time. The regulation of cash flow into and out of the market
is then done by the central authority.

Cash is regarded as the only visible form through which money can be presented. The ability of cash to
provide a lot of tangibility to the whole idea of money has made it so popular. However, the big
question is whether money needs to have a physical form that people can identify with. The answer
could be a big no.

Money in the form of cash has so many cons than pros. Below are some of the disadvantages:

Carrying cash has a lot of inconveniences. Besides that, cash is very difficult to manage.
Furthermore, cash cannot be tracked or insured as cash once it is lost. When stolen recovery
becomes impossible.
Printing of cash is expensive. Other expenses associated with cash involve inspection,
movement, guarding and storage.
Paper currency is susceptible to counterfeiting.
Criminals favor hand to hand cash due to lack of paper trail.
Cash transactions cannot be tracked which makes them less transparent. This encourages anti-
social practices such as laundering of money.
It becomes difficult for the government to monitor compliance with tax where cash is used.
 Excessive usage of cash leaves a lot of money outside the formal economy. These thwarts the
policies that are geared towards managing the rates of inflation.
The current monetary system has a lot to do with global warming and other environmental ills
on a globally perspective due to the rate of the economic growth associated with the present
system.

As a result of the drawbacks highlighted above, the use of cash is already gaining a negative view from
certain governments. The US government already views the use of cash as a suspicious activity that
warrants reporting to the authorities.