A preview of nations fighting cash misuse and going cashless

There should be no doubt in anybody’s mind that lowering cash transactions in the economy is a “good thing” for the economy, and eventually if every transaction goes through the banking system, it brings in accountability and transparency, which helps curb illegal activity.

Indian government decided to ban usage of Rs 500 and Rs 1000 notes, which was probably one of the biggest monetary policy decision taken for an economy of the size of India.

Different economies have adopted different strategies to fight usage of cash in the economy.

In Belgium no longer is cash used to pay for real estate and there is 3000 euro limit on cash payments for other assets unless it is purchased second hand.

Denmark in 1990s used to have 80 per cent of retail purchases made in cash. In 2015 the same figure now stands at 25 per cent. The Danish government is confident to go cashless by 2030.

In Germany there is cap of 5000 Euros on all kinds of cash payments where as in Spain the Spannish government has banned cash payments of more than 2,500 euros since 2012.

A country like Ecuador has become the first government to officially launch a digital currency, called Dinero Electronico, which is completely administered and controlled by a central bank. The digital currency was launched in 2015.

India may adopt measures on similar lines of global practise and ban using of high ticket notes in future.