There is a lot of talk about the death or disappearance of physical currency from the markets across the globe. At first glance, this seems like a perfectly reasonable probability, especially given the ease with which people today can utilize their purchasing power electronically. Numerous methods of spending “digital currency” are already available and the constant introduction of new technologies means that this is becoming easier and more common all of the time.
In the minds of some people, reverting to more physical currency seems archaic and even foolish. For better or for worse however, it is fairly certain that physical currency will always be a part of the human economic and financial systems, no matter how advanced it may become.
Today, remittances can be made via cell phone, as can the purchases of other goods and services. Online and cell phone apps are available to help people do everything from getting around town to having goods and services delivered directly to their doorstep so that they do not have to get out and about in town. Online markets are a very powerful and economically strong marketplace that should not be casually dismissed as some passing fad.
Rather, these markets need to be embraced and utilized to assist in the economic and financial growth that accompanies them and for the benefit of the people using their services. In fact, this sub-economic system has grown so large and so fast that some people can, theoretically at least, go their entire life, living well and never having to touch a piece of paper currency or a physical coin. Does that mean that digital or crypto currencies can replace physical currency?
It is certainly possible that these digital means could replace the need for the physical currency, but it is highly unlikely that it will ever actually happen. Why? The use of digital and crypto currencies is very likely to continue its present path of growth and expansion. It is very likely that one day before too long, these electronic transactions will far surpass those conducted using actual monetary currency.
According to one report by a company called International Data Corporation (IDC), the Philippines is the fastest growing nation in regards to the use of Smart Phones and Smart Phone technologies. The number of cell phones being used in the Philippines actually exceeds the number of people, though that is not to say there are not people who do not have cell phones, only that their use is prolific throughout the nation. So why is it not very likely that the physical currency will go away?
Like much of the world, there is a vast swathe of the Philippine population who is poor. These people often make their living a peso or two at a time if they are fortunate, though often less than a single peso is profited for single transactions. These people will always need a way to conduct transactions. The person selling “eats and treats” on the streets for example, selling a single cigarette stick or piece of candy, or the person selling banana kyu or kamote kyu is not going to be very likely to stick around and wait for a cell phone transaction.
Furthermore, such are the conditions for many of the poor people of the Philippines living in the provinces, that extended brownouts are a regular condition and not at all exceptional. Is it likely that they are going to ever quit doing business merely because nobody has access to a charged phone? What about the government and corporations though?
How many times have stories been published in major news outlets about government agencies and large, international corporations being hacked and data being lost? Is it possible to believe that these same corporations and governments are unaware of the dangers? Is it even possible to build a computer system that cannot be hacked?
How likely is a scenario wherein a major, international corporation or a government put all of their proverbial eggs in a single basket, to risk their entire economic system and livelihood on the benevolence of anyone who may find a way into their computer system? Somehow or another, that does not seem very likely, though there is one additional scenario that virtually nobody really wants to contemplate ... though it does bear consideration. What would happen in the event of a war or even a massive solar flare like the many that have been noted in news stories around the globe?
No nation is going to place its entire economic and financial system at risk of being wiped out in a single blast, manmade or natural? At the end of the day, the physical currency that people carry around in their wallets provides more than just a sense of comfort. Physical currency serves far too many needs and fulfills far too many demands for the people and that is something that can never be replaced.