| by Victor Cherubim

( June 5, 2014, London, Sri Lanka Guardian) The falling use of cash both coins and even currency notes over the last few years is noticeable, but hardly surprising. E-commerce (trading on the internet) has taken off by leaps and bounds, with Amazon, EBay and the Chinese counterpart, Alibaba, all vying for online business. In the shopping malls and on the High Street UK too, the chip and pin connected by contactless payments systems are commonplace. International transfers of money with PayPal and other cashless transfers are now available to many. This makes cash superfluous, encouraging people, shoppers and businesses alike, to make transactions without carrying or tendering cash.

In fact, the saddest part of all is that soon even the use of cheques will become a thing of the past. Bank cards (Debit and Credit Cards) are becoming quicker than change and faster than clearing houses. Shoppers can swipe their cards, for up to £20.00 in UK without use of a pin number at the tills, with Wi-Fi and without signature. This doubtless entices and encourages people to carry plastic rather than cash. Oyster Cards are also now common for train and underground travel in London. Soon, in the summer 2014, buses, too will go cashless.

Little wonder that mobiles will allow contactless payments, creating a single device for all payments on or offline, which is secure than carrying cash. The use of this new technology thus provides an alternative to cash for low value payments. This is called “Paym,” a mobile payments device, which lets you pay a friend safely using just their mobile number.

Whilst this trend has emerged in electronic payments for goods and services, trading and investing, in stocks and shares, corporate bonds and gilts too, are convertible to virtual instruments.

Though cash use is on the decline, it does not necessarily follow that we will not have the use of cash. The Bank of England notwithstanding is converting paper money notes into plastic notes, similar in use as in Australia, Canada and some other parts of the world. This is one way of reducing the wear and tear of notes in circulation, but also a way of restricting supply. creating scarcity.

Will there be choice?

Over centuries we have had various mediums of value, trading as cash – currency. We had sea shells, expensive spices, fine silks; coins made of metals – silver, gold, recently copper as currency in circulation. Now we have Bitcoin paving the way for a new value mechanism, but it is yet to be commonly acceptable.

Money is a medium of exchange, a unit of account and a store of value. For these reasons, silver and gold were chosen repeatedly throughout history. The preferred currency was once the Gold Standard, later UK Sterling, the US Greenback Dollar and now the Chinese Yuan. These currencies were called Reserve Currencies, acceptable worldwide.Any innovations increase choice, it is anybody’s guess whether they will spell doom for cash forever.

Currency Trading -FOREX

Currency trading in the City of London is in the news recently. “UK to Gold plate New Forex Rules” This is to ensure confidence in the fairness and effectiveness of financial markets which is central to the status of London as the World’s Financial Capital.

The benchmark for currency trading in particular is targeted. Currency Traders will soon face strict rules governing how they trade FOREX, how they behave as part of a British crackdown that is in the offing which is expected to go above and beyond international efforts at curbing manipulation, investigations into FOREX and Libor benchmarks. The City was considered too open for manipulation by traders and brokers. Good conduct was needed according to the Chancellor of the Exchequer, George Osborne, to shore up London’s reputation as the World’s Top Finance Centre, leading to gold plating of regulations.

Money laundering

The rope is getting tighter and tighter for money laundering. Days ago, an Owner and two Currency Exchange workers, were jailed at Southwark Crown Court for laundering over £100 million of criminal cash through their London Bureau de Change. The three were thought to have taken a cut of up to three percent per transaction between 2005 and 2009. “Their money laundering service was discovered by HM Revenue and Customs during investigations into two separate cocaine trafficking incidents. The three men invested their ill-gotten gains in properties in UK, France and India and were reported to have used this also to pay for their children’s private school fees”. They were found guilty of money laundering offences under the Proceeds of Crime Act 2002.

Under the Money Laundering Regulations, even the Schools can be investigated for benefitting from the proceeds of crime.

Digital Economy

UK’s prime concern is not undermining trust but the primacy in its Digital business, in finance, fashion and e-commerce, as a world leader.”A key part of the government’s long term plan is building stronger and safer banks as well as cashless society that can do more to support Britain’s consumers and business”.