Our society is moving faster and faster towards its cashless future, paradoxically at the same time losing trust in traditional banking. Does it mean that we are ready for Bitcoin? Is it time for it to officially enter the financial scene?
Giving up on traditional banking
When a mobile security researcher/developer at Zimperium wrote that he is giving up on traditional banking and would be living on Bitcoin, it was to express his frustration with the banking system for being told to “trust” that his money is safe even when he has no idea where it is or who is controlling it. Just like anyone else in his situation would have done.
Simone Margaritelli writes:
“At the same time, I hate the idea that someone is monitoring how much I can withdraw or deposit at any given time. It’s my money and I should be able to access it whenever I want, without the interference or input of the government or banking officials.”
According to Margaritelli. the same goes for mandatory waiting times on wire transfers—this isn’t a technical issue. Banks are free to continue speculating on your money even when you are not able to access it.
He calls banking fees “a huge scam” saying that they are “simply way too high for the quality of service provided”.
14.5 billion debit card by 2021
However, his view reflects the outcome of a new report released by Payments UK, the trade association for the payments industry.
The report, entitled UK Payment Markets 2016, says that cash is still the most popular payment method in 2015 accounting for roughly half (45.1%) of all payments. On the other hand, it predicts that notes and coins will drop to being used for just over one in four (27%) payments by 2025.
The report provides an overview of current and future payment behaviour in the UK. It revealed that over 72,000 payments were made every minute in the UK in 2015 by consumers and businesses - totaling more than 38 billion payments. By 2025 this will go up to 79,044 payments every minute (or 42 billion in the year), with increasing card usage playing a major part. 14.5 billion debit card payments are predicted as the most popular payment method by 2021 overtaking the forecast of 13.0 billion cash payments for the first time.
Half of all payments are made with cards
Payments UK also forecasts another landmark in 2025, when it says credit, debit and charge cards will account for more than half of all payments made (50.2%) – driven in large part by the increasing popularity of contactless.
Not only in the UK, bills and coins now represent just 2 percent of Sweden’s economy, compared with 7.7 percent in the United States and 10 percent in the euro area. This year, only about 20 percent of all consumer payments in Sweden have been made in cash, compared with an average of 75 percent in the rest of the world, according to Euromonitor International. Sweden had nearly 2.4 billion credit and debit transactions in 2013, compared with 213 million 15 years earlier.
Cashless society = opportunity for Bitcoin?
The question is whether the drop in cash use will translate into a greater adaptation to the growing popularity of the digital currency. Going by Margaritell’s explanation, the issue of practicality may arise when it comes to getting fiat from a Bitcoin wallet. He suggested that the most obvious option is via debit cards - as suggested by the Payment UK report - through one of a few online services like CryptoPay which allows users to open a Bitcoin wallet and receive a real debit card connected to it.
Tuur Demeester, author of the financial newsletter MacroTrends, says to CoinTelegraph:
“Yes, I believe Bitcoin will benefit from the push towards a cashless society. Digital fiat money is always held by a bank, and if banks get in trouble in the future, they be subject to bail-ins.”
According to Demeester, this means that we'll see scenario's like Cyprus in 2013, or Argentina in 2001, where people's money is locked up in the bank. Digital bearer assets like Bitcoin can benefit greatly if this were to happen, as they combine the safe haven properties of gold with much greater flexibility.