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Cash Less Economy

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July 17, 2017

What was the issue?

State bank of India started promoting cash less transactions.

What is digitized economy?

  • Digital economy refers to an economy that is based on digital computing technologies.
  • The digital economy is also sometimes called the Internet Economy.
  • Increasingly, the "digital economy" is intertwined with the traditional economy making a clear delineation harder.

What are the advantages of digital economy?

  • Transactions are digital, no need of safe guarding physical currencies.
  • Time saving and faster means of exchange.
  • The government able to track any transaction.
  • There is increasing tax revenue.
  • Dealing with criminal transactions is easier.

What are the issues with digital economy?

  • Physical cash often offers the easiest and cheapest way to deal in many low-value transactions.
  • It make no economic sense for small businesses to build the infrastructure required for digital payments
  • Cash less economy would threaten the stability of the banking system.
  • Cash acts as a natural check on inflationary government policies.


Source: The Hindu

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