The Case For Cash

A dozen countries out of the 28 European Union (EU) members had legal limits on cash transactions in place at the end of 2015. Portugal, the country leading with these limits, had an EUR 1,000 legal limit on all cash transactions. Additionally, the discussion about introducing more of these limits is ongoing in almost all EU member states and recently, a new European Commission initiative seeking to introduce a compulsory EU-wide limit appeared.

Cash helps to mitigate risks that will not disappear in a postmodern society.

The European Central Bank even phased out the production of the 500 euro note and Australia started seriously considering putting an end to the 100 dollar note in November 2016. There are also many rumors that Sweden is getting ready to abandon cash altogether.

The Risks 

Being cashless is modern and progressive. You need an empty wallet to go with your Tesla, iPhone and neon handmade socks! An impression of a “race” is created. But looking closer, the reasons to hold on to cash have nothing to do with backwardness. Cash helps to mitigate risks, which will not disappear in a postmodern society:

Control. Transferring your whole financial life into a bank means parting with your own control over one aspect of life. Locking your accounts takes seconds. It doesn’t matter how rich you are or how big financial cushion you created. A simple bureaucratic mistake, a typo or a confusion of identification numbers by a bank, or a debt collector (not so unusual in Slovakia due to chaotic debt collection rules) can send you into deep financial problems overnight.

In cashless societies individual purchases can and will be used against you.

Middleman risks. Cash transfer is an immediate transfer of value between two parties. Electronic payments (with the exception of some cryptocurrencies) always involve a middleman and create a new layer of risk. The middleman has the power to override the payment in some cases and you cannot be sure if the transaction just conducted will really materialize.