What would you do and how would you feel if the government decided you’re no longer allowed to use cash? While many of us use mobile payment systems or debit cards in lieu of paper money these days, we all still use it frequently. You probably have several bills in your wallet or purse right now. So, if the Trump administration (or any other) came out and said it was scrapping cash, you’d probably be angry — and worried.
But mostly, you’d just be confused. Why would the U.S. government, or any government, want to get rid of cash? After all, paper and coin-based money systems have been in place since the dawn of human civilization. Currency helped us grow economies and build modern nations.
Yet, that isn’t stopping one of the world’s largest and most important countries from effectively banning it. India, the second most populous country in the world, has pulled the plug on cash.
We’ll get into the how, why, and when on the following pages and ultimately discuss whether India managed to accomplish what it hoped to. But what you need to know, to start, is this is a largely unprecedented move. Despite our modern reliance on credit, debit, and mobile payment systems, cash is still the king in many respects. You can use cash when the power goes out and to buy things off the street. It’s universal and hard, if not impossible, to track.
So why did Prime Minister Narendra Modi trash India’s cash? And how did it turn out? To give you a hint, it hasn’t been a smooth transition.