Digital Currencies cause stir and cash remains king
It is interesting how the world perceives things from the actuality of what is occurring and if you have been a live long enough than you probably have enough experience to think "WTF is wrong with people". Or "WTF, That's not even true". But alas this is the situation of the world over as more and more people come to life more and more opinions form from snippets of knowledge and misinformation.
No more so than the current battles of digital currencies and while we are all aware that China did develop the digital Yuan and it was utilised to track purchases and could be blocked from certain things. The world has taken this piece of information and turned on the current CBDC world with digital currencies perceiving governments around the world are all doing the same.
CBDCs and public perception
CBDC's are digital currencies built on blockchains operated and backed by central banks and have become quite the focus with Ethereum becoming the chain of choice by the banking world. While it is no surprise and information is readily available that Reserve Banks are researching CBDC's as a form to compliment the current financial system with Swift banking now utilising bockchain technology for faster more secure cross border payments.
This hasn't prevented people from across the world diving into conspiracy theories and protesting digital currencies in Australia politician's are regularly blasted with anti crypto currency emails and council meetings have been hijacked by conspiracy theorists that consume fakes news and are under the impression the United Nations is driving a one world new order which involved one digital currency and will be able to implement what China has done.
Hijacked Narrative
Now I am not saying that it couldn't be done as we have seen with China but in the current form CBDC's are being developed on the Ethereum Network as a smart contract
so this renders the point of dominance useless as the approval mechanism is held by Ethereum nodes. If anything the bigger concern is that the Banks stand to increase profits by outsourcing the teller roles which they didn't even have to do anything to cause as the sector is doing it itself.
With a business mindset if there is a cheaper alternative that is already operational and will increase profits for banks, who wouldn't investigate implementing the system? although this is bad news for workers and a new battle will emerge.
In truth, many should probably consider investing in Ethereum mining infrastructure to maintain employment, although nothing is stopping the banks from boosting their infrastructure to include Ethereum nodes and then replacing staff with machines.
Cash should never be replaced
Use of cash has continued to fall with digital transfers increasing which has resulted in a reduction in available Automatic Teller Machines. Although a recent survey found younger generations preferred digital transactions and mainly used cash for discreet services and activities such as purchasing sex and drugs or items they didn't want others to know about.
The complete opposite happens with older people with findings showing more people hoarding cash and trust plays a large role. I guess as you get older you have more personal experiences with being financially impacted in dodgy deals or reporting assets and income.
Couples also hide cash from each other in the likelihood of a separation so the other doesn't know. Cash remains an important part of adult life.
How important is Cash?
You've probably heard stories about oldies with loads of cash under their mattress or stored in old ice cream containers in the freezer as well as gold and silver. All these measures are quite important for a number of reasons and not just as a store of wealth.
When we use ATM cards we are not aware of the amount of money we have or are spending and without a constant asset it makes it easier to spend and faster. Using cash makes people conscious of what they are doing as they are using a physical product.
As humans we do not want to lose things or waste it so we are more likely to be more financially responsible when using cash over digital currencies or debit cards.
Saving with physical cash is a lot easier too, this is how oldies did it and why. When you have some resources like cash you can take some and put it somewhere else as the old saying goes, out of sight, out of mind. Unlike a bank account which may have direct debits or if you're out your more likely to spend if you got it on you.
If you don't have it, you don't have it so it makes you change your behavior and aid in asset protection and wealth accumulation. Now I am not saying for everyone to start storing cash under your mattress as this could be a dangerous thing if you are robbed.
But it might be time, if you're not using cash to start limiting your access to how much digital currency and debit you are using and if you are able to store some cash then precious metals would be the next step up. A little better than cash as they hedge against inflation and look pretty too but often require a decent amount of cash to buy in.
Remember kids, Cash is King!
image sources provided supplemented by Canva Pro Subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services
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