Using traditional banknotes for payments seems to be on the decline following a rising interest in digital currencies and contactless payments methods.
Using traditional banknotes for payments seems to be on the decline following a rising interest in digital currencies and contactless payments methods. This is according to Evan Sohn, the co-founder of the Sohn Conference Foundation. He said the same in his interview with CNBC following an event at the London’s Sohn Conference, underlying that a reality without any fiat money is fast approaching.
Sohn stated that the world is not very far from restaurants that only accept online payments. In these establishments, the customers could only download an app and provide electronic payments. There would be no option for either cash or check.
In spite of the fact that most payments are still based on cash, Sohn believes that the world is not far away from a reality where there will be no bank notes. Tim Draper, a venture capital investor shares this outlook and believes that the digital currencies, like bitcoin, for example, will replace all fiat currencies in only five years from now. Speaking at a conference in Portugal that took place last month, Draper said that the those who use fiat currency in five years will be laughed at. Instead, he believes that bitcoin, as well as other digital currencies, will become relevant. With them, individuals will have no reason to own or use fiat currencies.
Draper thinks that the fiat currency system will gradually disappear as more individuals turn to Ethereum and bitcoin. He is also certain that all digital currencies, currently numbering exactly 1,025, will at some point interrelate. This would make them easy and simple to use, even across any national borders, which is something fiat money lacks. Also, with the digital currency market rising in value, more investments are bound to enter the same ecosystem.
Currently, bitcoin is trading at around $10,700 after it recovered from an earlier fall in price that led to a price of $9,200. This followed a beginning of the week marked with a lot of volatile trading. On the other hand, according to CoinMarketCap, Ethereum is trading at around $461.
Still, while the price of bitcoin is rising, the occurrence of it being accepted in businesses like retail stores is still limited. Not just this, but the digital currency value is constantly rising, which is why people are more likely to keep than spend them.
Japan is one of those rare countries that have embraced the bitcoin payment method. In May 2017, a reported 300,000 companies and retailers in the country began accepting digital currencies. Earlier in the same year, Japan introduced legislative changes that allowed for BTC (bitcoin) to be used as a fully recognized payment form. This further underlined the growing popularity of bitcoin in the country.
Sohn added that even though he believes that all paper money will vanish, he is not sure if the same role will be taken by Ethereum, Mastercard, bitcoin, or something else. However, he is sure that the next step is definitely leading away from any paper-based currencies.