‘Less-cash’ can ensure inclusion of masses

With Centre’s decision to withdraw Rs 1,000 and Rs 500 notes as legal tender, an ongoing debate on cash, no-cash or less-cash society has gathered steam.  It is hard to define what money is. If one looks at the nature of money, one is inclined to agree with Aristotle who believed that every object has two beings. From the coral shells in Africa to minted coins during the Roman Empire to the paper currency notes during the Tang Dynasty in China to Stockholm Banco issuing the first notes in Europe in late 17th-century, money/currency has undergone changes.

Money has primarily three functions, namely, as a store of wealth, as a unit of measurement, and as a medium of exchange. The first function can be served well by a physical asset as well — like gold or a piece of real estate — but the other two functions of money — as a unit of measurement and as a medium of exchange — seem to be better conceived in terms of cash currency than physical objects/commodities.

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