Tax analyst Vyacheslav Cherkashin believes that the proposal to completely abandon cash circulation in Ukraine is premature, to say the least. This will have a devastating effect in several directions at once.
Talks of political characters about the immediate abolition of the cash institution are essentially unproductive and, in principle, not feasible. While I’m going to book, the cashless process is inevitable, but imprecise in advance and far from abrupt.
Now to the cashless economy fans:
- one in five Ukrainians does not have a bank account, but more importantly, at least every tenth or twelfth (US, UK, German experience) will continue to consciously avoid it;
- Low level of financial literacy in the over 60 and 18-24 age groups for a second (data after 21 years);
- The financial coverage of the Ukrainian village is statistically lower than the city;
- small businesses operating through cash registers or cash registers will lose 1.5-2% of profitability (they will be received by financial intermediaries);
- Cash has two critical properties that are always in demand: (1) resilience during power outages or cyber attacks; (2) it is the most democratic (independent of government and corporate control) payment method.
The results are on the surface. Several million Ukrainians, especially the elderly and those living in rural areas, will be completely excluded from economic life, and small and micro businesses will lose income.
Hence the conclusion – don’t break the fire and don’t do stupid things!
By the way, Brett Scott’s bestselling book “Cloudmoney: Cash, Cards, Crypto and the War for Our Wallets” wrote very well about the shortcomings of the cash ban.
And finally, in addition to the real cashless boom, the pandemic has brought with it other trends. For example, some counties and cities in the US have banned cashless stores (San Francisco, Philadelphia, New Jersey).
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Source: Focus
John Holton is a seasoned author and journalist, known for his expertise in economics. He currently works as a writer at 24 news breaker, where he provides readers with in-depth analysis and commentary on the latest economic developments. With a background in finance and a talent for explaining complex economic concepts in a clear and accessible way, John’s writing is a must-read for anyone interested in staying informed about the economy.