Recent research by the Congressional Research Service (CRS) in the US has revealed that there is a migration away from cash in retail transactions, adding to the possibility that alternative methods of payments including cryptocurrency could gain traction moving forward.
The May 10th report by the CRS indicates that alternative non-cash payment systems, including bitcoin or other digital assets, in the purchase of goods and services, is fast becoming the mode of settlement for the future.
The current alternative to cash, the report found, is what is it called “traditional noncash payment systems” such as credit cards and debit cards and even included mobile payments in the same category. With lawmakers around the globe now looking at inclusive legislation for cryptocurrency as a payments system it may not be too long before the CRS include crypto in this traditional non-cash category.
Amy Zirkle, interim CEO of the Electronic Transactions Association, a Washington-based trade group for the payments technology industry, had her own view of this progression away from cash:
“While cryptocurrencies may not supplant traditional payments aggressively in the near term, the value of blockchain and innovative approaches to the payments industry extends beyond fiat currency replacement,” commenting that there may be added value for using cryptocurrency and blockchain in solving cross-border payments, streamlining communication between financial institutions, and better securing data.
There is a sign that diminishing in cash’s integrity is worrying some state legislators with New Jersey, Massachusetts and Philadelphia have enacted laws that largely prohibit cashless stores and more recently the San Francisco Board of Supervisors passing legislation that requires walk-in retailers to accept cash.
A possible comforting observation by the CRS for such cash friendly state legislators is the Congressional Services comments that cryptocurrency is still a long way off being able to handle current volumes of transactions handled by cash:
“At present, the systems underlying cryptocurrencies do not appear capable of processing the number of transactions that would be required of a widely adopted, global payment system.” but that said, the CRS concludes that cryptocurrencies nevertheless “have the potential to significantly affect the usage of cash and traditional systems for payments.”
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