Big (Dirty) Money Goes Around The World

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Fenntucky Mike

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I was reading through the National Bank of Ukraine's press releases and came across their response on "Preventing the spread of coronavirus infection COVID-19 during cash transactions" dated Mar, 18 2020, link here. https://bank.gov.ua/en/news/all/pro-profilaktiku-poshirennya-koronavirusnoyi-infektsiyi-covid-19-pid-chas-operatsiy-iz-gotivkoyu  On a side note, the NBU actually has a decent website with English translations and good info on all banknotes and coins produced by the Banknote Printing and Minting Works in Kyiv, along with their monetary policies (they revamped the website early last year). Anyway, reading through the press release one finds the typical precautions as to be expected when in a biological crisis and in regards to physical money. Reduce contact, minimize receipt of funds, non-cash payments, etc.The NBU is also requesting that old notes be returned for disposal, all the while assuring the public that the cash reserves are sufficient to meet the countries needs. This release is probably to some extent standard "boilerplate" that is similar to releases and precautions being taken by banks around the world. 

This press release has me wondering how much the coronavirus did or will speed up the elimination of cash and coin, is this pandemic another log on the pyre of physical money? In Ukraine's case they just recently shuffled their coin and banknote denominations around. Starting on Oct, 1 2019  1, 2 and 5 kopeck coins, (the penny equivalent) were were withdrawn from circulation and are no longer accepted, (the 25 kopeck is also being eliminated, just not immediately) all transactions are now rounded to the amounts nearest multiple of 10. Next was eliminating the 5 and 10 hryvnia banknotes  and replacing them with coins of the same denomination. The latest adjustment was the addition of a 1,000 UAH banknote, which is double the previous highest available denomination banknote. These moves along with additional adjustments decreased the available denominations in Ukraine from 17 to 12 (6 coins and 6 banknotes currently). All this was to lower the cost of manufacturing and streamline transactions, two more logs for the pyre.  Lower denomination banknotes have already gone the way of the Dodo in Ukraine is the rest of the "dirty" money next?

Ukraine's newest denomination, put into circulation on Oct, 25 2019.

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I'm not sure what the situation is in the rest of the world , but the paper money at least isn't going away until they find a way to resolve the issue of the "unbanked." There's still a good chunk of the population that doesn't have a checking account or a credit card and they don't have easy access to a bank. The situation is or is going to get worse for some people because banks are increasingly going online and encouraging people to bank exclusively online - even cashing checks, when you actually get one, with an app on your phone. If you switch to requiring people to have electronic money which they are going to be required to monitor and access electronically you're then going to have to deal with the idea how internet connectivity / smart phones / data plans as a basic right or something people absolutely have to have in order to function within the society.

We're not going paperless or cashless yet. 

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1 hour ago, Revenant said:

We're not going paperless or cashless yet. 

Agreed, but this is just another push towards going paperless. I don't expect that the U.S. will go 100% paperless in the next 50 years (maybe not ever 100%) but by then I would think the production of paper currency will be primarily driven by the collectibles market. In under developed areas/countries it will take longer or we may see a step backwards towards barter systems, pseudo currencies, or people are automatically issued a bank account, who knows what the future will bring but it is interesting to speculate. National Banks around the world are developing digital currencies in anticipation of the future and to retain their market share in the financial system vs cryptocurrency creation by private players. Ukraine has been developing a digital currency, the E-hryvnia, since 2016 and launched a pilot project for issuing E-hryvnia into circulation in 2018. Paperless will not be immediate but it is imminent for the majority. 

People being born now or who have already been born, may not ever use physical money in there life. My 14 year old nephew got into my 1996 Ford F250 and asked me how to roll down the window, I pointed to the window crank/handle and the look on his face was one of disbelief. As was the look on my face, when I realized he had never seen a manually operated window before. He had no idea what to do, as far as he was concerned that truck might as well have been equivalent to Fred Flintstones footmobile. Not that he would have understood that reference anyway. :roflmao:

Edited by Fenntucky Mike

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18 minutes ago, Fenntucky Mike said:

People being born now or who have already been born, may not ever use physical money in there life. My 14 year old nephew got into my 1996 Ford F250 and asked me how to roll down the window, I pointed to the window crank/handle and the look on his face was one of disbelief. As was the look on my face, when I realized he had never seen a manually operated window before. He had no idea what to do, as far as he was concerned that truck might as well have been equivalent to Fred Flintstones footmobile. Not that he would have understood that reference anyway. :roflmao:

I hear ya. I do.

My 4 year old had trouble understanding recently that my laptop - which was bought 3 months after his birth - did not have a touchscreen like his tablet and you have to use the keyboard and mouse.

I am soon to be 34 years old and I have received my paycheck as a physical check precisely 1 time in the ~16 years of my working life. When I was on unemployment they mailed me a pre-paid debit card and they just loaded my benefits onto the card every 2 weeks.

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