Paper currency will expire soon, according to an economist

Professor of economics and author of the book says: "money future, Eswar Prasad, on the Yahoo Finance website, the paper currency" cash It will soon become a thing of the past:

“The End of Paper Currency "cash" It is definitely getting closer, and cryptocurrencies, including Bitcoin, paved the way for that revolution.”

Transaction digitization has been well underway over the past few decades, but serious discussions of a full digital dollar are relatively new.

The prospect of a central bank digital currency (CBDC) in the US gained momentum in the year 2021The Federal Reserve reportedly plans to begin the process of reviewing the associated costs and benefits Central bank digital currency As soon as possible next week.

While the chances of digital currency adoption in the near future are slim, digital payments have grown exponentially over the past few years, lending credence to the idea that the United States is heading into a digital economy.

But cryptocurrencies are unlikely to become the dominant form of payments in the future, due to their inherent volatility.

However, stability bonds, such as those linked to fiat currencies, may become more prevalent as the digital economy develops. Prasad said:

“In my view, cryptocurrencies may not ultimately prove to be a viable medium of exchange. Especially decentralized ones, such as cryptocurrencies, which have a very volatile value and which have a number of other drawbacks.

But it has already led to the emergence of balance funds, which bolster their value with stable currency reserves, such as the US dollar and US dollar securities, that can provide more efficient payment transactions.”

Paper or digital currency: the goal is financial inclusion

Prasad said the government-backed digital currency could be an equal benefit to the burgeoning private sector, by allowing for greater financial inclusion.

And it was Providing banking services to those who do not provide banking services A popular target for fans of cryptocurrency and other financial technologies.

As the Internet has brought to the layman, many financial tools have historically been available exclusively to professionals.

And new developments in financial technology, have given these people more influence and control over their finances.

Prasad said:

“The goal within many countries is financial inclusion. The idea is that the central bank makes it easier for everyone to access a low-cost digital payment system, including those on low incomes who may not have access to a credit card or bank account.

Which will help people bring a lot of them into the financial system and also serve as a gateway to basic banking products and services for credit, savings, etc.”

China launched its own digital currency, albeit in a series of trials, earlier this year, overtaking the United States to be the first country to create its own digital currency.

However, this does not necessarily mean that it is far ahead of the United States in knowing which country serves as the world's reserve currency. Prasad said:

“I don't think there is an advantage to the former here, surely if the digital yuan becomes widely used inside and perhaps outside the country someday, you could see the renminbi Renminbi They are used more for international payments, and for settling commercial and financial transactions.

But in the end, as a store For value and a reserve currency, it matters not only the economic size or depth of financial markets, but also the institutional framework of countries.”