Will Covid kill Cash?

61 Replies

Will covid kill cash?

Digital payments have been growing by leaps and bounds but will this health crisis be the final straw?

I have seen a lot of local businesses request that you pay digitally or in some cases no longer accept cash.  Paying with cash is a far more intimate exchange than using a card.  You hand the cashier money and they make change from a draw that is filled with cash from pervious customers.  The clerk makes change and hands it to you.  It is counted, put back in the customer's wallet and they leave with the money and any germs that may be on the money.  

Some of the new apps and cards that you can just tap against the card machine reduce or eliminate the extra contact.

Collectively the federal government (Treasury, Federal REserve, DOJ) have been trying to limit and/or eliminate it for years.  Will this be the event that is needed to end cash as we know it? 

Hey Lesley,

Do you deal with cash a lot in real estate? Do you think this will effect real estate? 

We already only accept payments online so this wouldn't impact us and our tenants. 

So long as people want to buy things without other people learning about it -- guns, drugs, prostitutes, trips to a pub that were supposed to be to the office -- there is going to be a market for some sort of untraceable medium of exchange.

So long as all digital finance leaves a computer trail that can be easily followed by law enforcement and divorce attorneys, people are going to have a use for cash.

People may want to soak silver coins in Clorox or just take their chances, but trust me, there will always be some kind of cash.

"So long as all digital finance leaves a computer trail that can be easily followed by law enforcement and divorce attorneys, people are going to have a use for cash."

Ever hear of Bitcoin?

Originally posted by @Steve Morris :

"So long as all digital finance leaves a computer trail that can be easily followed by law enforcement and divorce attorneys, people are going to have a use for cash."

Ever hear of Bitcoin?

 Right. Let me know when you can use Bitcoin at the local Pub to buy a beer.

there are large % of population that are barred from checking accounts ( either to many bounced checks in their life) or other reasons.. this is why the money order and western union is such a huge business. 

I would much rather risk getting a few germs on my cash than be at the mercy of a tyrannical government who can freeze a digital bank account whenever they see fit to starve a dissident. 

Right. Let me know when you can use Bitcoin at the local Pub to buy a beer.

Few places will take it and there is a BitCoin ATM in a mall here.  Didn't know drug dealers worried about beer money.

Nah.  I'm trying to figure out how to provide state legal cannabis operators with banking options at scale as it is.  Any way to be a bank without a federal charter?

They've been trying to get rid of the penny for a while now, right?  It costs more than a cent to make.  Let's start with the penny and go from there. Cash isn't going anywhere. 

I do agree that COVID is accelerating the process toward the inevitable of digital currency. But I do believe it'll be a few years before we make the full switch. 

Originally posted by @Alvin Sylvain :
Originally posted by @Steve Morris:

"So long as all digital finance leaves a computer trail that can be easily followed by law enforcement and divorce attorneys, people are going to have a use for cash."

Ever hear of Bitcoin?

 Right. Let me know when you can use Bitcoin at the local Pub to buy a beer.

 https://99bitcoins.com/15-plac...

And this article was from 2018. It's happening whether you think it's silly or not. More Hedgefunds are buying Crypto. PayPal just added Bitcoin buying/selling. So not just for criminals and drug dealers anymore ;)

That said, I don't think physical cash is going away just yet. But it's definitely taken a hit in COVID. Like someone else said though, maybe get rid of pennies first :D

Originally posted by @Steve Vaughan :

Nah.  I'm trying to figure out how to provide state legal cannabis operators with banking options at scale as it is.  Any way to be a bank without a federal charter?

They've been trying to get rid of the penny for a while now, right?  It costs more than a cent to make.  Let's start with the penny and go from there. Cash isn't going anywhere. 

My state just legalized cannabis and I am trying to figure out what type of opportunity that presents for me. Are you seriously trying to figure out some way to be the bank? I am really curious what you have in mind.

I agree on the penny, but don't stop there. I say get rid of the nickel and the dollar bill, replacing it with coins. 

Trade my sheep for your calf>> give you $5 in cash for you calf>> use my debit card to buy your calf>>BITCOIN for your calf.

It's evolution. Google CBDC's. Central bank digital currencies. Now we have governments in talks with crypto companies. Once that happens, bitcoins marketcap will be in the trillions.

I would diversify my portfolio to include cryppto to hedge against the USD. Purchasing power of the dollar is at an all time low. I owuldn't want to be keeping much cash right now

Originally posted by @Joe Splitrock :
Originally posted by @Steve Vaughan:

Nah.  I'm trying to figure out how to provide state legal cannabis operators with banking options at scale as it is.  Any way to be a bank without a federal charter?

They've been trying to get rid of the penny for a while now, right?  It costs more than a cent to make.  Let's start with the penny and go from there. Cash isn't going anywhere. 

My state just legalized cannabis and I am trying to figure out what type of opportunity that presents for me. Are you seriously trying to figure out some way to be the bank? I am really curious what you have in mind.

I agree on the penny, but don't stop there. I say get rid of the nickel and the dollar bill, replacing it with coins. 

 Yes, I am seriously being or figuring out how to be a bank to taco truck guys, a chicken farmer and other cash-heavy operators which may or may not involve legal b to b cannabis.  But I will run out of property to collateralize loans with.   Some are well positioned to digitize legal and declared cash. Not a 'Breaking Bad' car wash. 

Yep, I thought why stop at the penny, too.  Baby steps, brother. Elimimate the penny and we'll see about nickels and singles👍

@Lesley Resnick

I don’t see cash going away any time soon. The majority of my tenants don’t have bank accounts. When I ask them why they say the bank fees are too expensive. It is cheaper to deal with all cash and buy money orders to pay rent and other bills.

Originally posted by @James Lane :

Trade my sheep for your calf>> give you $5 in cash for you calf>> use my debit card to buy your calf>>BITCOIN for your calf.

It's evolution. Google CBDC's. Central bank digital currencies. Now we have governments in talks with crypto companies. Once that happens, bitcoins marketcap will be in the trillions.

I would diversify my portfolio to include cryppto to hedge against the USD. Purchasing power of the dollar is at an all time low. I owuldn't want to be keeping much cash right now

 And bitcoin is at an all time high right now. I wouldn't want to keeping much in crypto right now. In fact if I owned crypto I would be selling right now. The USD is far more stable and secure over time. I prefer none of the above. I prefer physical assets like rental property. If the USD was replaced by crypto tomorrow, I could just start collecting that instead.

Originally posted by @Joe Splitrock :
Originally posted by @James Lane:

Trade my sheep for your calf>> give you $5 in cash for you calf>> use my debit card to buy your calf>>BITCOIN for your calf.

It's evolution. Google CBDC's. Central bank digital currencies. Now we have governments in talks with crypto companies. Once that happens, bitcoins marketcap will be in the trillions.

I would diversify my portfolio to include cryppto to hedge against the USD. Purchasing power of the dollar is at an all time low. I owuldn't want to be keeping much cash right now

 And bitcoin is at an all time high right now. I wouldn't want to keeping much in crypto right now. In fact if I owned crypto I would be selling right now. The USD is far more stable and secure over time. I prefer none of the above. I prefer physical assets like rental property. If the USD was replaced by crypto tomorrow, I could just start collecting that instead.

I said diversify by adding some crypto to my portfolio. That doesn't mean 100% of my portfolio. Bitcoin is at an all time high for a reason. By your logic we should all short the dow jones because it's also close to an all time high. The USD is not the powerhouse it once was. The fed can only pump so many $ and go into so much debt before it becomes a problem. Every other great world power has fallen. Romans, Greeks, Chinese dynasty etc. I am not saying the USA is going to fall down the drain tomorrow. I am saying people should be open minded when it comes to crypto and new technology. The same people who want to hold onto cash are the same people who complained about the internet. People who own clothing stores are now failing because of amazon and online shopping. if you are not adapting to the world around you, you will be left behind. 

 

Originally posted by @James Lane :
Originally posted by @Joe Splitrock:
Originally posted by @James Lane:

Trade my sheep for your calf>> give you $5 in cash for you calf>> use my debit card to buy your calf>>BITCOIN for your calf.

It's evolution. Google CBDC's. Central bank digital currencies. Now we have governments in talks with crypto companies. Once that happens, bitcoins marketcap will be in the trillions.

I would diversify my portfolio to include cryppto to hedge against the USD. Purchasing power of the dollar is at an all time low. I owuldn't want to be keeping much cash right now

 And bitcoin is at an all time high right now. I wouldn't want to keeping much in crypto right now. In fact if I owned crypto I would be selling right now. The USD is far more stable and secure over time. I prefer none of the above. I prefer physical assets like rental property. If the USD was replaced by crypto tomorrow, I could just start collecting that instead.

I said diversify by adding some crypto to my portfolio. That doesn't mean 100% of my portfolio. Bitcoin is at an all time high for a reason. By your logic we should all short the dow jones because it's also close to an all time high. The USD is not the powerhouse it once was. The fed can only pump so many $ and go into so much debt before it becomes a problem. Every other great world power has fallen. Romans, Greeks, Chinese dynasty etc. I am not saying the USA is going to fall down the drain tomorrow. I am saying people should be open minded when it comes to crypto and new technology. The same people who want to hold onto cash are the same people who complained about the internet. People who own clothing stores are now failing because of amazon and online shopping. if you are not adapting to the world around you, you will be left behind. 

 

 You may be a little dramatic here, comparing people with cash to people who complained about the internet. The internet and online shopping solves problems for people. Crypto is largely used (as currency) by people who don't want their activities tracked. That means people involved in illegal activity or wanting to avoid taxes. Crypto currency doesn't solve problems for the average person. Even if crypto currency gains traction, it is hard to say if a specific type such as bitcoin will even exist in the end. Any new technology has casualties along the way and often the first model fails. Napster was set to revolutionize music, only to be replaced by music streaming services. The lesson learned from Napster and other peer-to-peer services is that you cut out the middle man, but the middle man doesn't like that. Monetary systems like consistency. Once you add speculation into the mix, you have a fluctuating value, which doesn't work for the trade of goods and services. As much as you may not like the feds policies, they do aim to stabilize and provide a constant in currency and inflation. 

Betting on non government issued crypto is betting against the government. Maybe a collapse or revolution is coming, but I am not sure even crypto is safe from something that catastrophic. My cousin claims when that happens that bullets and food will be the new currency. I agree you can make some money in crypto, but I just don't see it as more stable than the USD at this point. Ultimately I like real estate because there is a physical asset underlying the investment. That physical asset fills one core human need, which is shelter. What are you left with if crypto currency collapses? What human need does it fill? 

No doubt people have made a ton in crypto currency. I just see it as speculative and risky. My opinion and you are entitled to yours. 

Originally posted by @Karl B. :

I would much rather risk getting a few germs on my cash than be at the mercy of a tyrannical government who can freeze a digital bank account whenever they see fit to starve a dissident. 

The above is a good argument for crypto. I'd add that simply having a form of money with value decided by people vs. central banks has some hedges against political extremism.

However, anyone who thinks Bitcoin is leaves no trace and is 100% anonymous does not understand blockchain technology.

I have bought waffles and coffee with Bitcoin and I'm always happy to accept payment in Bitcoin.

No, but it will devalue it by about 22%, which is the amount of new cash the government has injected into the US economy since the beginning of Covid.

In the meantime, it's a great time to own assets, which 'should' appreciate due to the new cash pumped in.

Have you thought about parking your cash reserves in TIPS or some other form of liquid inflation protected asset?

Originally posted by @Joe Splitrock :
Originally posted by @James Lane:
Originally posted by @Joe Splitrock:
Originally posted by @James Lane:

Trade my sheep for your calf>> give you $5 in cash for you calf>> use my debit card to buy your calf>>BITCOIN for your calf.

It's evolution. Google CBDC's. Central bank digital currencies. Now we have governments in talks with crypto companies. Once that happens, bitcoins marketcap will be in the trillions.

I would diversify my portfolio to include cryppto to hedge against the USD. Purchasing power of the dollar is at an all time low. I owuldn't want to be keeping much cash right now

 And bitcoin is at an all time high right now. I wouldn't want to keeping much in crypto right now. In fact if I owned crypto I would be selling right now. The USD is far more stable and secure over time. I prefer none of the above. I prefer physical assets like rental property. If the USD was replaced by crypto tomorrow, I could just start collecting that instead.

I said diversify by adding some crypto to my portfolio. That doesn't mean 100% of my portfolio. Bitcoin is at an all time high for a reason. By your logic we should all short the dow jones because it's also close to an all time high. The USD is not the powerhouse it once was. The fed can only pump so many $ and go into so much debt before it becomes a problem. Every other great world power has fallen. Romans, Greeks, Chinese dynasty etc. I am not saying the USA is going to fall down the drain tomorrow. I am saying people should be open minded when it comes to crypto and new technology. The same people who want to hold onto cash are the same people who complained about the internet. People who own clothing stores are now failing because of amazon and online shopping. if you are not adapting to the world around you, you will be left behind. 

 

 You may be a little dramatic here, comparing people with cash to people who complained about the internet. The internet and online shopping solves problems for people. Crypto is largely used (as currency) by people who don't want their activities tracked. That means people involved in illegal activity or wanting to avoid taxes. Crypto currency doesn't solve problems for the average person. Even if crypto currency gains traction, it is hard to say if a specific type such as bitcoin will even exist in the end. Any new technology has casualties along the way and often the first model fails. Napster was set to revolutionize music, only to be replaced by music streaming services. The lesson learned from Napster and other peer-to-peer services is that you cut out the middle man, but the middle man doesn't like that. Monetary systems like consistency. Once you add speculation into the mix, you have a fluctuating value, which doesn't work for the trade of goods and services. As much as you may not like the feds policies, they do aim to stabilize and provide a constant in currency and inflation. 

Betting on non government issued crypto is betting against the government. Maybe a collapse or revolution is coming, but I am not sure even crypto is safe from something that catastrophic. My cousin claims when that happens that bullets and food will be the new currency. I agree you can make some money in crypto, but I just don't see it as more stable than the USD at this point. Ultimately I like real estate because there is a physical asset underlying the investment. That physical asset fills one core human need, which is shelter. What are you left with if crypto currency collapses? What human need does it fill? 

No doubt people have made a ton in crypto currency. I just see it as speculative and risky. My opinion and you are entitled to yours. 

Bitcoin doesn’t need to be a medium of exchange. It can do well simply as a store of value. All money is is trust. And right now people trust Bitcoin is worth about $19,500 and the time of this writing. Don’t get me wrong, I love real estate because it produces cashflow. I have a handful of properties that I am sure will appreciate as time goes on and they will continue to produce cashflow. I do, however, think exposure to the cryptocurrency space belongs in the portfolio (1-20% of net worth). I am using it as a wild savings account that I will pull from from time to time to buy more real estate, though I won’t completely liquidate all my crypto, ever. I have converted dollars to cryptocurrency for the long haul. The world is screaming for a one world currency. Cryptocurrency is the people’s money. Central banks are creating less trust in government fiat by the day. We’ll see, it will be interesting to see how this plays out. I agree that the middle man might not like getting cut out. Some governments may ban it and we will surely see more volatility as we go. Though, this guy loves the volatility, it gets my blood pumping. 10-15% swings a day don’t surprise me anymore. When it goes down 15% I buy more and when it goes up 15% I hold on for dear life (I sit on my hands) or sell some to diversify into other asset classes, like my preferred asset class, real estate. I would only allocate a percentage of your net worth and trade cryptocurrency as you see fit in the meantime. The cryptocurrency space needs regulation. PS- I like Ethereum at it’s current valuation over Bitcoin.