Cashless Society

Is the United States ready?

By Michael Scheibach, Contributing Editor

As we approach the transformational year of 2020, another trend promising to change how all financial transactions are conducted is gaining strength. Very simply, it’s a “cashless society,” defined as a society in which digital cash replaces banknotes and coins. A new study from Juniper Research, in fact, forecasts that consumer spending on digital commerce will reach $14.7 trillion by 2022, up by 60 percent on last year’s figure of $9.2 trillion.

“Digital cash can power P2P, online and retail payments,” says Laurence Cooke, CEO and founder of nanopay, “and its adoption will accelerate a decline in the use of traditional cash. Digital cash can provide consumers and retailers with real-time settlement, irrevocability and a host of other enhancements that make it a superior choice.”

Sweden provides perhaps the best model for a cashless society. Cash payments there currently account for just 15 percent of retail sales, and many merchants no longer accept cash. Even more significant, some banks no longer handle cash. In a recent blog post, San Francisco Fed President John Williams pointed out that Swedish banks have encouraged digital bank transfers, charged for checks and invested in card payment systems since the 1960s. Banks also collaborated on a mobile payments app called Swish.

Yet Williams goes on to say, “In the world of Apple Pay, bitcoin and Square, many believe that the days of cash are numbered. More payments are being made with a click, a tap or a swipe, and it feels like we’re carrying fewer notes and coins than ever before. But what do the data say? Are claims about the end of cash to be believed, or, like Mark Twain’s famous quip, are reports of its death greatly exaggerated?”

Cooke does not feel the reports are exaggerated. Rather, he believes the United States, with its strong economy and financial services industry, is conducive to the adoption of digital cash. But that raises the ultimate question: How do banks make the transition to digital cash? Here, Cooke cites his company, nanopay (, developed by the Royal Canadian Mint as a scalable and regulator-friendly replacement for physical currency.

He points out that digital cash is fully collateralized by fiat currency, such as the U.S. dollar, rather than the ever-fluctuating value of a cryptocurrency (i.e., bitcoin). By nature, digital fiat currencies’ value is more stable because it is less contingent on unregulated market changes. Blockchain-based platforms also have the drawback of requiring the distribution of replicated ledgers across all nodes in the system and leverage proof-of-work model to achieve “trustless” consensus. According to Cooke, this overhead means that transactions can take many minutes to process, while the nanopay platform enables instantaneous payments between fiat currencies.

Security, of course, remains a major concern, especially in a world with escalating data breaches. Financial consultant Justin Pritchard writes, for example, that hackers “are the bank robbers and muggers of the electronic world.” Cooke emphasizes, however, that the nanopay platform features state-of-the-art cryptography with bank-grade security that can be deployed in the cloud or on premise. Payments can be sent over unsecure channels, further reducing underlying cost and risk. And all transactions are final and ensure non-repudiation.

So when can we expect a cashless U.S. society? Cooke believes by 2025 we will be close. In fact, the process is already under way, with the adoption of payment apps and technology’s integration into bank offerings; by 2025, he says, exchanging fiat-backed digital currency will be fully integrated into nearly every payment, whether it’s P2P, B2B or payments made across the globe.


Michael Scheibach, Contributing Editor,

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