[Action] Have you ever used cash lately?

Kakko riding the subway to work.

Since it uses the postpaid transportation card function of a credit card, public transportation is used without the hassle of charging separately.

Storm work after work!

When the long-awaited lunchtime comes, they wander around the company looking for restaurants around the company together with the filmmakers of Mabu News.

Lunch is calculated by dividing by 1/N like a knife.

What if other colleagues counted at once?

Simply send Kakko's share of the amount to Kakao Pay and you're done!

After work, I go shopping to blow away the stress of work.

You can also pay for the products you put in Kokko's precious shopping cart with Naver Pay in no time.

Today's Mabu News started with Kokko's day.

What a normal day, isn't it?

There is one thing that cannot be seen in Kokko's day... Can you get a sense of what it is?

It's cash.

Not a single penny was spent in cash despite several expenses during the day.

With credit cards, Kakao Pay, Naver Pay, and other electronic money, everything was settled.

Today's Mabu News will take a look at a cashless society.

The question Mabu News asks this week is this.

Donations for Ukraine, in cryptocurrency

Let's talk about Ukraine for a moment.

52 days (as of April 17th) have passed since the start of the Russian invasion.

According to reports from Ukraine reported in foreign media, Russia used chemical weapons in Mariupol, and the number of civilian deaths exceeded 10,000.

Major Western countries are concerned that if the reports are true, the situation would be very serious.

The war situation should not get worse any longer, which is a very unfortunate situation.

The Ukrainian government is requesting relief supplies from each country.

At the end of February, the Ukrainian government launched an online fundraising site, did you know that?

This site accepts donations in cryptocurrency.

Cryptocurrency fundraising is a much simpler process than traditional fundraising, attracting many people from all over the world.

As of 10:00 on April 13th, including Bitcoin, Ethereum, and Tether, the aggregate amount raised exceeded $65.72 million.

That's over 80 billion Korean won.

Not only cryptocurrency, but also NFT records the horrors of war and is issuing them.

Cash is hard to find in Kokko's day and in the Ukrainian war.

It seems that the appearance of cash is gradually disappearing in our real life.

A world where you don't have to spend money

As you can see in real life, the use of cash continues to decline.

The use of cash continues to decrease, especially in developed countries.

Sweden and the UK have already advanced rapidly into a cashless society since the 2000s, with consumption centered on credit cards and mobile devices.

In Sweden, microchips are implanted in the back of the hand and payment is made with it.

The graph below shows the proportion of cash settlements in major countries.

As of 2020, the proportion of cash payments in Sweden is only 9.0%.

The proportion of cash settlements in Korea (2018) is also quite low at 19.8%.

The convenience of using cash has definitely decreased compared to the past.

Accessibility is declining.

In fact, the number of ATMs and bank branches is also declining.

Analyzing the number of ATM installations relative to the population of 100,000 using data from the Bank of Korea, in 2013, the figure was the highest with 246.4 units.

In 2020, the most recent data, it was 226.9, a decrease of 7.9% compared to 2013.

The number of bank branches also follows a similar flow.

If you look at the number of commercial bank branches nationwide compared to the population of 100,000, they peaked at 15.6 in 2012 and are declining.

In 2020, the number was 12.7, a decrease of 18.4% compared to 2012.

The graph below shows the number of card payments per person by major country based on the Bank of International Settlements (BIS) data.

You can check the central bank data of major countries in BIS, and I drew a graph of only those countries with 300 or more payments per year.

In 2012, Korea swung the card 303.6 times, or 0.8 times a day (25 times a month!), and in 2020, it took second place after Singapore.

In 2020, the annual number of card payments in Korea is 620.7, which means 1.7 credit card payments per day.

In 2020, due to the increase in non-face-to-face transactions due to the spread of Corona, the number of card payments in major countries decreased.

You don't have to swipe your card to pay with your mobile phone.

Technology is so advanced that digital transformation across all industries is accelerating.

New payment and settlement services have emerged centered on big tech companies such as Naver and Kakao, and non-face-to-face transactions have increased dramatically due to the spread of COVID-19.

In addition to electronic currencies such as Kakao Pay, Naver Pay, and Samsung Pay, cryptocurrencies such as Bitcoin and Ethereum are also used for transactions.

It is not surprising that the cryptocurrency fundraising in Ukraine mentioned earlier is not surprising.

In a way, this moment in which we are now living may be viewed as a historic currency conversion period.

Digital currency can be divided into Electronic Currency, Virtual Currency, Crypto Currency, and CBDC.

Electronic money is issued by financial companies or e-financial companies like PayPal, Samsung Pay, Kakao Pay, and Naver Pay, but can be exchanged for the same value as cash.

On the other hand, virtual currency refers to the case where the issuing entity is a business, not a financial company or electronic financial company.

This includes cash or coupons that can be used on the Internet or in games.

Cryptocurrency does not have a fixed issuer.

Anyone can publish an algorithm as long as it can be solved.

Unlike other digital currencies, the value is not fixed, but changes according to supply and demand.

CBDC is a digital currency issued by the government. More details will be explained later.

Countries that make CBDCs

In a time when cash is disappearing and the transition to a digital economy is rapidly taking place, the government and central banks are not silent.

Money should play a role as a universal means of payment, but cash issued by the government and central banks is not playing that role as it used to.

Moreover, as private tech companies are increasing their influence, the central bank is also starting to move.

So, a new currency called CBDC has emerged.

Have you ever heard of CBDC?

The words may be unfamiliar, but if you open them up, you will easily understand the meaning.

CBDC is Central Bank Digital Currency, which literally means digital currency issued by the central bank.

In the mid-2010s, with the advent of the first cryptocurrency, Bitcoin, central banks also began to take interest in the technology.

As network technology developed day by day, distributed ledger (a kind of decentralized) technology began to attract attention, and in 2015, the central bank of the UK announced the need for the issuance of CBDCs to the world for the first time, and a new concept called CBDC appeared.

In Latin America and Africa, some emerging countries have already introduced CBDCs.

The Bahamas introduced CBDC in October 2020 and the East Caribbean National Organization and Nigeria are piloting them in 2021.

China, Uruguay, and Ukraine are piloting CBDCs, and related experiments are underway in Korea.

As Kakao was selected as a digital currency pilot by the Bank of Korea, simulation experiments have been underway since last year.

There are about 6 countries in which the simulation is being conducted, including Korea.

Notable is China's CBDC.

Among major developed countries, China is mentioned as the country with the highest potential for digital currency adoption in 2022.

At the last Beijing Winter Olympics, the digital yuan (e-CNY) was opened to foreigners.

Currently, pilot distribution is being carried out in 11 cities including Beijing and Shanghai, and as of the end of last year, the accumulated transaction amount was about 87.5 billion yuan.

China is sincerely trying to introduce CBDCs to the extent that it is said that there is a digital yuan behind the nullification of Alibaba's listing.

Why are you doing this?

To go from digital currency to US dollars!

The US dollar has the status of a reserve currency in the real world.

It has a huge impact on the global economy.

One word from the United States is enough to change the direction of the global economy.

Although China is often referred to as the G2 as a counterpart to the United States, it is not easy to break the hegemony of the dollar.

What if it is difficult to shake the US dollar hegemony in the real world?

China is going to become the key currency in the digital world.

It contains China's desire to seize the currency hegemony in the digital world.

As China accelerated the development of CBDCs, the quiet United States also began to move.

Last month, President Biden announced that he was officially pushing for a digital dollar.

Cashless Society Good or Bad?

From CBDC prepared by the state to digital currency being released by the private sector…

In some ways, it feels like a cashless society has already arrived.

What will be different when a cashless society arrives?

It is convenient because you can make purchases and even financial transactions in an instant with just a smartphone.

It takes much less time than when you send and receive cash, and you don't have to worry about managing and storing cash.

You must have heard of such a story.

It is said that it takes a lot more money than 10 won to make one 10-won coin.

Before 2006, it cost about 30-40 won to make one 10-won coin.

In 2006, I changed the metal composition of the 10-won coin to reduce it, but it still costs close to 20 won per 10 won.

In a world without cash, there is also the advantage of saving money because it does not cost money to make coins and banknotes like this.

Another advantage is that transparency extends to electronic records.

No one knows where the 1,000 won bill I have came from.

Of course, up to the previous transaction can be remembered, but no one knows the history of the transaction until a bill or a coin enters me.

In a cashless society where transactions are digitally conducted, the anonymity of cash may disappear.

Because every trace of every transaction will remain as a digital record.

It can prevent crimes like money laundering.

Of course, these are not the only positive aspects.

Since everything is done electronically, there is no answer if the system goes down.

Payment itself may not be made at all.

Similar situations have already occurred abroad.

Did I mention that East Caribbean has already introduced CBDC?

DCash, the digital currency of the East Caribbean, has been offline for several weeks due to technical issues in January of this year.

Of course, transactions through digital currency did not take place.

Another thing, that everything is recorded electronically means that the government can know all of my economic activities in detail.

This is because all transaction records of people using digital currency are stored electronically.

The government can know where I bought what and how much I bought.

The privacy issue is also a hot potato.

In that respect, there is also an analysis that China is the most advantageous country for CBDC.

In other democracies, a legal system should be created to prevent invasion of privacy, but China, where the state power is strong, can be relatively easy to access.

If digital currency is used, there is a possibility that the digitally underprivileged will be marginalized from economic activities.

The elderly and the disabled are relatively more dependent on cash than other groups, but if we become a cashless society, it will be fundamentally difficult to pay in cash, which can cause great inconvenience.

In Sweden, the closest country to a cashless society, a survey found that older people were less satisfied with basic payment services.

This is the article prepared by Mabu News today.

We looked at the situation with data about a cashless world. What do you think the future of money is?

Is a cashless world an irresistible future?

Will digital currencies eventually replace or complement cash?

Let us know what you think in the comments below!

Thank you for reading this long article today.

(*This article is an edited article from the Witchcraft Newsletter.)

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 : Hye-Min Ahn  

 : Jun   -Seok Ahn

 : Su-Min Kang, Dong-Yong Kang