Cash is becoming less common in China since mobile payment apps have reached the mobile marketplace. The industry has risen to a $5 trillion dollar industry in 2016.
Not only has that industry risen, it means the use of the yen has fallen. It has fallen so much so that the government has stopped producing yen that is over 100 yen, equivalent the $15 American dollars. A disadvantage to this is people are forgetting what cash looks like, and will give out counterfeits in change. Or even claim that you are paying with counterfeit bills.
This trend is now spreading to nearby countries as they are getting pressure from Chinese tourists. This could also negatively impact tourism to the country. As the apps require a Chinese bank account, which tourists are not going to have. What kind of impact will this cause surrounding countries who are beginning to adapt?
Source: https://www.cnbc.com/2017/10/08/china-is-living-the-future-of-mobile-pay-right-now.html
It is very interesting that the government has stopped producing large bills of yen... I'm trying to figure out the logic behind this for one, I feel like currency is a part of a culture, and for two, it doesn't make sense monetary wise either. Do you think China is just ahead of everyone on this change to electronic money? Similar trends are happening around the world where people are using credit and debit way more often than physical cash, so do you think the rest of the world will be more likely to stop producing money in large bills eventually as well? I personally don't use cash very much, and it is rare that I would have $50 or more in my purse at once. With this, I see the reasoning behind smaller bill production, but with the problems you mention above I think it still makes sense to use and produce physical money.
ReplyDeleteWhat do you think is going to happen now with the stopped production of any yen over 100 yen? and how would that effect their economy?
ReplyDeleteThis is a very important and very serious global issue. Brianna, your question (and your instincts) are relevant. What do you all think are the negative consequences for average citizens and consumers in any society that no longer has physical cash/coins?
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