Reduced cash in circulation

[PacoMartin]

Originally Posted by artillery77

Neither. What bothers me is that counterfeiters will not need to compete with increased security provisions to create fake money. We already don't accept older $100 bills at our store because the fakes are too good.

When you say "older $100 bills" does that mean any notes that are not in color? I've heard that only some of the seven big headed series of green $100 notes are distrusted: 2006A, 2006, 2003A, 2003, 2001, 1999,and 1996. I know that overseas the 2006 and 2006A series are often accepted but the older five series are not accepted.

Originally Posted by artillery77

The second aspect that bothers me is that these apps are all taking personal information. How long will it be before there are accurate records (accurate because payments must be made) of how many meals you've eaten out, where you went during your day, what activities you perform, what items you purchased on demand to people that are not you??? Does my insurance company get to charge me a higher rate if I went to a skydiving club? Does my employer get to find out if I went to a hookah lounge and they have an anti-tobacco policy? Do retail stores get to tier their service level based on my historical shopping patterns? Can I no longer simply drop money into a basket for a surprise donation to a not-for-profit, and do so anonymously, so I don't get junk mail fliers from them for the next decade? (and yes, I know I can't deduct that)

Sweden is about to have a major discussion about this next year.

As of Oct 31, 2017 Sweden is circulating 45.2 SEK billion in all denominations of banknotes. As recently as 2009 Sweden was circulating 59.4 SEK billion in 500kr banknotes alone (worth roughly $60 apiece).

Sweden's central bank says part of the concerns that you have is that so called "electronic money" can also be defined as "commercial bank money" which is ultimately based on loans and can relatively dry up if the banking economy changes.

Paper money is "central bank money" and has no risk of the bank going bankrupt. It is also completely anonymous. Normally the government puts limits on anonymous nature of physical money. In the USA the amount of $10,000 is normally the upper limit amount for a government free transaction or carry on an international flight without being bothered.

Sweden's Central bank is going to debate the value of issuing electronic central bank money which will have more in common with paper money. The exact terms have not been decided, but it will certainly have a limit on how big a transaction you can do (just like paper money). The government is not interested in creating a means to do massive money laundering, but people want the convenience of electronic transactions with the privacy of paper transactions. Of course, like paper money, that may mean all transactions are final.

[PacoMartin]

South Korea is circulating 443 coins in four denomination worth about US$38 per capita .
The decision to abolish coins in three years is being undertaken without a democratic vote. By abolish, I mean that they will be demonetized, but presumably they can still be deposited into bank accounts or exchanged for paper money.

While coins are not very valuable, most people want to get their change back. So they will adopt an electronic payment scheme. In turn as electronic payments become nearly universal, the use of small value banknotes will also diminish.

Since larger value banknotes are routinely used in a different manner than small denomination banknotes, the impact may be minimal. However, Cha Hyeon-jin, an official handling the issue at the Bank of Korea (BOK), predicted that there is a “good chance” that the move to go coinless could possibly lead to a “cashless society” in the coming years

In the USA there is $16 in dollar coins and $126 in fractional coins per capita in circulation.

It is traditional in the USA to never demonetize money, so the coins will retain their value forever. But what would you think if the USA stopped making coins entirely (with a three year advance notice)? Many of the coins would be voluntarily turned in at banks, and the existing coins could still be used as long as they are circulating. But eventually everyone would have to adopt an electronic payment system or simply lose their change.

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South Korea's largest banknote was W10,000 until a 50,000 won bill began circulating on 23 June 2009. The country has been divided on the issue. Proponents of larger denomination bills content that Korea’s currency hasn’t kept pace with greater wealth and costs in the country, while opponents believe that having notes greater than W10,000 will have a negative impact on Korean society through increased corruption, spiraling costs and excessive spending.

Most Americans I know felt that it was ludicrous to go to an ATM and get such a huge stack of bills.

But the W50,000 banknote worth about $45 has become very popular. From the 2009 introduction until the end of 2016 circulation has increased to about 30 banknotes per capita. The three smaller denominations are circulating at 67 banknotes per capita.

There is no reason to think that abolishing coins will diminish the use of the largest value banknote. The smaller ones will probably drop in use as more and more people pay for purchases electronically.

[PacoMartin]

https://www.youtube.com/watch?v=BNlHT9dpWqc