We are moving rapidly to a world without cash. In fact, the phrase war on cash was coined (coins?) by the card companies years ago. The aim was to get everyone moving to cards, not cash. It’s now gone beyond that, as everyone wants us to move to digital wallets.
All well and good.
The theme is illustrated well in China by this guy who shops with just a mobile phone:
But then, at the opposite end of the scale, is this guy who wants to pay with cash because he doesn’t have a mobile phone:
The thing is that there are extremes here. Most of the population are digitally comfortable, but some are not. What do we do for the few who are not?
This came to my mind over the last week with this headline: ‘A fundamental right’: UK high street chains and restaurants challenged over refusal to accept cash
Is the use of cash a fundamental human right?
No. It is the retailers discretion and choice as to whether they would accept cash or not. It varies by country but, in most countries, a retailer has a right to make a decision. For example, in UK law, whilst cash is “legal tender” (meaning it cannot be refused as payment for a debt ordered by a court), this doesn’t mean retailers must accept it for all transactions.
Source: Martin Lewis
Equally it is interesting that Sweden – one of the most advanced cashless nations – they have found it is not all sunshine and roses.
Why? Because, in the event of war, how do you pay for things? Worried about the conflict in Ukraine, Sweden’s defence ministry sent every home a brochure entitled If Crisis or War Comes in November, advising people to use cash regularly and keep a minimum of a week’s supply in various denominations to “strengthen preparedness”.
There’s an interesting dystopia here: there’s a war on cash but you need cash in a war!
What I find particularly interesting is the two countries cited in this article were the first to move to paper money. Coins have been around for millennia, but paper money is relatively new. Sweden first used paper money for payments in 1661 when Stockholms Banco, the precursor to the Swedish central bank, issued Europe’s first banknote. Before this, China first used paper money during the Tang Dynasty (618-907 AD), and later developed into true paper money called “jiaozi” during the Song Dynasty (960-1279 CE) in the 11th century.
Apparently, Chinese cities had all been using their own forms of cash and coins. However, as the Silk Road trade grew, and more Chinese cities became connected, a trusted currency was needed and, backed by the Song Dynasty, the jiaozi became it. Here’s a short breakdown:
Tang Dynasty (618-907 AD):
Faced with the challenge of transporting large amounts of metal currency, the Tang government began issuing certificates to pay local merchants in distant areas. It was called “flying cash” because of its tendency to blow away.
Song Dynasty (960-1279 CE):
The “jiaozi” (交子), a form of promissory note, emerged in the 11th century, initially in the Sichuan region, and later expanded to other areas.
Government Involvement:
Initially, jiaozi was a private enterprise, but the Song court later introduced management requirements and policies, eventually establishing a Bureau of Exchange to issue circulating paper notes in 1023. The use of paper money evolved from promissory notes to government-issued banknotes, with the Song Dynasty’s jiaozi being considered the first true paper money in history.
Yuan Dynasty (1271-1368):
The Yuan dynasty, founded by Kublai Khan, also issued paper money, known as Jiaochao. More importatnly is that, from 1227 onward, Khan’s Government created the first fiat money called Chao, paper bills circulated throughout the Yuan domain with no expiration date.
Source: Fandom
To guard against devaluation, the currency was convertible with silver and gold; the government also accepted tax papers in paper currency. Khan issued a new series of state sponsored bills to finance his conquest of the Song, although the lack of fiscal discipline and inflation made that move an economical disaster. To rectify this Khan took all gold and silver from private citizens and foreign merchants, forcing traders to only use the paper money. Due to this Khan is considered to be the first fiat money maker.
Later Developments:
The production of paper notes grew, leading to inflation and eventually the elimination of paper money in China in 1455, and it wouldn’t be adopted again for several hundred years.
What is notable, as I discovered the other day, is that Marco Polo, a Venetian merchant, explorer and writer who travelled through Asia along the Silk Road between 1271 and 1295, discovered this in his travels and was quite amazed. From his book The Travels of Marco Polo, he wrote:
He makes his money after this fashion. He makes them take of the bark of a certain tree, in fact of the mulberry tree, the leaves of which are the food of the silkworms, these trees being so numerous that whole districts are full of them. What they take is a certain fine white bast or skin which lies between the wood of the tree and the thick outer bark, and this they make into something resembling sheets of paper, but black. When these sheets have been prepared they are cut up into pieces of different sizes. All these pieces of paper are issued with as much solemnity and authority as if they were of pure gold or silver; and on every piece a variety of officials, whose duty it is, have to write their names, and to put their seals. And when all is prepared duly, the chief officer deputed by the Khan smears the seal entrusted to him with vermilion, and impresses it on the paper, so that the form of the seal remains imprinted upon it in red; the money is then authentic. Anyone forging it would be punished with death.
So money issued by Kublai Khan, one of many grandsons of Ghengis Khan, would be created on the Silk Road using trees inhabited by silkworms. Strange, but true!
The thing that sits with us today is that if you refuse to accept a cash payment, should you be put to death?
Probably not, but it’s an idea that may work for some.
Postscript:
If cash is no longer important, why are Aussies annoyed that the central bank has dropped King Charles from their new bank notes? Mummy is not happy either …
