1-888-998-3948


Thursday, February 15, 2018

Why Currency Won’t Become a Thing of the Past

Why Currency Won’t Become a Thing of the Past
Source: www.frbsf.org

OnlineFXOrdering foreign currency online is easy with OnlineFX.

ORDER FOREIGN CURRENCY

 

 

Apple Pay, Square Cash, and Venmo are all ways to spend money without the use of any cash. As technology continues to advance we are finding more and more alternatives to simply making payments with cash. The question is, are the addition of these payment options really leading to an end of cash?

Here are the Facts

The Federal Reserve Bank of San Francisco pulled together the cash use in 42 economies across the globe, which together account for 75 percent of world GDP.

They estimated cash use by looking at currency in circulation, defined as the total amount of cash held by the public, including businesses, bank, and consumers. This data confirmed that currency in circulation has been increasing over the past decade, unlike popular belief.

Global Trends

Comparing currency in circulation growth with GDP growth in 42 countries, it has been evident that currency in circulation outpaced the growth of GDP, if not matched it in almost every country in the past decade.

“Presumably, very low interest rates in many countries over the past decade has been one factor boosting the demand for cash, as well as uncertainty following the global financial crisis.” 

Why Cash Still Remains

Despite many technological innovations that create new ways to make payments, there are a variety of reasons that cash is still held. Many people hold cash as a store of value. In an emergency or time of political or economic turmoil, holding cash can ensure immediate access to money.

Cash is also widely accepted and provides the convenience of not requiring a device or any type of account. The actual amount of cash the public chooses to hold can fluctuate with changing income and interest rates.

The Two Outliers

In contrast with the countries we were mentioning earlier, Norway and Sweden have seen their currency in circulation decreasing. Norway’s largest bank has actually eliminated cash in its branches.

Meanwhile, Swedish banks have promoted switching to cashless practices. “According to central bank, the Riksbank, cash transactions made up barely 2 percent of the value of all payments made in Sweden last year.”

As you can see, although many countries have adopted digital payment practices, cash is still highly common. Not only has currency in circulation been increasing over the last decade, but this increase has been even higher than the GDP increase. The only countries that seem to see a fully digital payments future are Norway and Sweden.

 

Get more foreign currency (FX) news >

 

About Currency Exchange International
Currency Exchange International (CXI) is a leading provider of foreign currency exchange services in North America for financial institutions, corporations and travelers. Products and services for international travelers include access to buy and sell more than 90 foreign currencies, multi-currency cash passport’s, traveler’s cheques and gold bullion coins and bars. For financial institutions and corporations, our services include the exchange of foreign currencies, international wire transfers, global EFT, the purchase and sale of foreign bank drafts, international traveler’s cheques, and foreign cheque clearing through the use of CXI’s innovative CEIFX web-based FX software www.ceifx.com

Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.
Posted By Jennifer Danuff at 01:00 PM
comments powered by Disqus

Platinum Passport

Travelers: Never miss a thing and be the first to know about CXI branch promotions, travel tips and hot trends.

Currency Insider

Corporations & Financial Institutions: Want to get ahead of the curve for the upcoming week? Get CXI's currency market trend analysis sent directly to your inbox weekly.