(This letter was contributed by: Reginald Sim, 31, banker)
Governments everywhere are moving their economies to move more and more towards a cashless society. The reason? Crime and tax evasion.
A lot of money is in the underground economy where criminal activity and businesses that evade taxes. In this economy, cash has no substitute that is capable of liquidity and universal acceptance.
Here’s one idea on how to wean our society off cash: stop printing large denomination notes and phase them out over a period of time.
You might ask how would a reduction of large denomination notes help? Criminals can just as easily hoard small denomination currencies couldn’t they? The answer is in logistics – it is not as easy to manage millions of dollars in small currencies. The weight and size would make them impossible to deal with. If it is just a few hundred thousand dollars, this shouldn’t be a problem. But proper criminal organisations deal with millions of dollars with of currency and it would make managing them very troublesome.
What about camouflaging ill gotten money through businesses? This is more difficult than one thinks. It requires fake invoices, false trades and a lot of paperwork in order to cover criminal transactions. The more paper there is, the higher the likelyhood of being discovered. This is why physical transportation of cash is still the preferred mode of money laundering.
Getting the Singapore population to abandon the use of cash will not be an overnight project. It is going to take very many years, maybe decades of weening off. But it has its benefits. Electronic cash is harder to be stolen, lost or misplaced. There is almost always a trail and security can be implemented for reversing mistaken transactions.