The concept of money is nothing new. It was recognized even in ancient times when people used a technique of barter and exchanged products and services instead of paper money. However, the understanding of money has been constantly changing over time, and now when you mention the word “money”, the first thing that comes to mind is paper currency. But the world continues to change, technologies develop and it has already become a time to say goodbye to a 100-year old trend and create some alternative forms of money.
Challenges of paper money
Even though the idea of paper money was indeed revolutionary, now as the world gets more digitized, the bottom line of paper currencies becomes more and more obvious. Although it’s really easy and convenient to use, the money itself has no actual value. The paper currency can always be impacted by the inflation rates and therefore, it’s very fragile and unstable. The only reason why money is still considered valuable is that everyone knows it’s globally accepted as a form of payment. However, ancient people somehow managed to live without paper money meaning that we can also function without using paper currencies as well. But the usage and the form of the money would never be the same as back in those times and this means we need to start working out some other forms of paper money.
The question of what we can use as money instead of paper got into the center of attention especially as a result of the Covid-19 pandemic. The virus made it even more clear that exchanging paper currencies from hand to hand is risky for our health. People can get infected in minutes by just touching a currency, however, at the given moment it’s hard to resist the temptation and say no to paper money because most ordinary people have no other possibility but to use and exchange paper currencies. But as the world started to realize the problem of paper money, probably the old system of paper money introduced by the Chinese back in about 770 B.C. will finally leave us someday and the world switches to some other forms of money. This doesn’t mean that the concept of money is going to disappear though.
Can digital money replace paper money?
The alternative to paper money has to be something more stable. This is why people usually think of digital currencies when they discuss the topic of other forms of money. The usage of cryptocurrencies is becoming more and more widespread and everybody starts to acknowledge its advantages. First of all, there’s no way to get infected while making transactions with digital money. But also, cryptos are more stable than any other type of money. This is why more people are buying cryptos every day and the increased demand can be seen everywhere. The Forex industry is a great example of a community where paper money tends to lose power. For example, on https://forextradingbonus.com/ you can see that most traders prefer to make transactions by using digital money like Bitcoin, as it’s easier, quicker, safer, and more convenient. Therefore, while choosing a broker it’s more important for them to find a website that accepts cryptos, and sometimes it’s even more essential for them compared to attractive bonus systems. This is why forex brokerages that accept cryptocurrencies usually have more customers compared to those who provide services without using cryptos.
However, not only cryptos are major factors that drive the attention of traders. Many forex traders prefer to make transactions and perform trading activities by using mobile applications. Nowadays laptops and PCs are not really convenient for everybody. This is why they also look for brokers that offer mobile phone-based services. This is why FX brokers with Mpesa enabled tend to be more successful because M-Pesa is a mobile phone-based money transfer service that makes deposits and withdrawals of funds much more convenient. But in any case, making these transactions would be impossible by using paper money.
But this is just one example. The advantages of digital currencies have never been so obvious and this is why some financial experts believe that in the near future the world may completely forget about paper money and switch to digital money. Although at the moment cryptocurrencies are not considered as widely accepted forms of money, the tendency to digitize money can be seen even in official institutions like central banks. Nowadays many countries have started to think about creating a central bank digital currency (CBDC). China is a pioneer between them and probably most of the leading countries will implement this completely new form of money. Currently, the CBDC is in the process of examination but nobody knows for sure if the ordinary people will ever be able to completely mean traditional forms of money and replace them with virtual money which is not tangible.
Other alternatives to paper money
Of course, cashless electronic payments are considered the most attractive alternative to traditional paper money but people have been creating some more creative ways to replace paper currencies. There have been many surveys on this topic and people have been developing insights about things that could have more value to people compared to papers regardless of where they live. For example, back in the times of the Soviet Union, you could easily use blue jeans and tins of caviar as a form of money and exchange them easily but now these things don’t have the same value as they have become widely spread. The same happens to traditional money – it loses value every day. But people worked out some other possible alternatives and here is a shortlist of the most popular things that could be used as money instead of paper:
- Gold – it’s the most common type of commodifying money which always has a value. Everybody understands how it works even without economic knowledge which is why it’s considered one of the best alternatives.
- Cigarettes – it may sound a bit odd but people see cigarettes as a form of money. Sometimes it’s even cold a black market gold and there have been times when people used cigarettes as money when the value of money was absent. However, the downside is that global health institutions will probably resist the idea of using cigarettes as money.
- Rice – Asians will definitely love the idea! Back in the 17th-century rice was considered as a form of money in Japan and the idea of getting paid in the form of rice could actually work nowadays as well, especially at times of food scarcity. Though it’s really a hypothetical scenario and nothing related to the real financial landscape.
- Big Macs – looking at the Big Mac Index, it’s not really a surprise that people think that way because Big Macs are already a part of the global economy. Therefore, formalizing the role of Big Mac and considering it as a form of money is not a field of fantasy. The same applies to the bottle of Coca-Cola.
And the list goes on. People have been talking about Smartphones, diamonds, and even bottled water as alternatives to traditional paper money. Although none of these things can actually replace money at the moment, the idea of implementing digital currencies is real, and sooner or later the world will definitely say goodbye to paper money and start using virtual means of money. However, completely refusing the concept of money is never going to happen and one thing that will change is just a form of this medium of exchange.