For hundreds of years, the monetary system of most countries has been based on the exchange of metal coins and
printed pieces of paper. However, because of recent developments in technology, the international community should
consider replacing the entire system of coins and paper with a system of electronic accounts of credits and debits.
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The observation mentioned in the statement seems to be quite thought provoking and interesting, and while analyzing the same keeping in view several of the aspects associated with it, I reach the conclusion that the international community should definitely consider replacing the entire system of coins and paper with a system of electronic accounts of credits and debits.
To begin with, it's a common observation that minting of currency notes and coins are a strain to natural resources as it requires mining of special metals, processing of alloys, felling of forests etc., to name a few. Also, every country mints its own currency, and that again needs to be changed to that of another country during the economic transactions. Also, the coins and currency notes need to be recycled once damaged. This wastage of natural resources can be easily avoided by a system of electronic accounts of credits and debits that involves no exchange of physical currencies, thereby preventing the dwindling away of scarce natural resources.
Then again, the economic system is constantly evolving globally and the barriers between trade and commerce are dissolving rapidly with each passing day. Therefore, the natural upshot is that the economies of various countries are entwined with each other. As a result, the metal coins and currency notes of one country need to be valued accurately vis-a-vis those of its trading partner, and finally the net transaction in physical form involves payment in the currency of another country. This cumbersome and error-prone situation can be resolved by having a central clearing house where the participating countries can reduce or add the appropriate figures and the transaction becomes more lucid and accurate.
Furthermore, the mandatory government regulations applicable to Finance sectors like Banking make it imperative to settle and close the transactions in a swift and legally compliant manner. Thus, the system of electronic accounts of credits and debits is perhaps the only one that can enable the involved parties to achieve the desired end-state.
Admittedly, the system of electronic accounts of credits and debits can also come with its share of problems as hacking by unscrupulous individuals, downtime in transactions owing to system failure or complexity in maintenance and upkeep. Additionally, the cost of replacing the existing Monetary system may turn out to be prohibitive. However, we ought to remember that any system comes with a string of attached issues, and the focus ought to be on how to make the system more robust, so that the end-goals are served without any serious compromise on economic and legal fronts. Also, the cost-savings gained from the reduction of the consumption of natural resources would be able to compensate for the cost associated with the set-up of new systems.
Thus, in summary, the replacement of the existing system of physical transactions in the monetary system of several countries in the world surely seems to be a fossilized one, and the same should be definitely substituted with the more dynamic and accurate system of electronic credit and debit accounts. With the rapid strides in the arena of technology and finance, and the changing perspectives and priorities of all the involved people, the replacement will definitely serve to facilitate and expedite the transactions accurately in day to day finance related activities.
printed pieces of paper. However, because of recent developments in technology, the international community should
consider replacing the entire system of coins and paper with a system of electronic accounts of credits and debits.
---------------------------------------------------------------------- ---------------------------------------------------------------------- --------------------
The observation mentioned in the statement seems to be quite thought provoking and interesting, and while analyzing the same keeping in view several of the aspects associated with it, I reach the conclusion that the international community should definitely consider replacing the entire system of coins and paper with a system of electronic accounts of credits and debits.
To begin with, it's a common observation that minting of currency notes and coins are a strain to natural resources as it requires mining of special metals, processing of alloys, felling of forests etc., to name a few. Also, every country mints its own currency, and that again needs to be changed to that of another country during the economic transactions. Also, the coins and currency notes need to be recycled once damaged. This wastage of natural resources can be easily avoided by a system of electronic accounts of credits and debits that involves no exchange of physical currencies, thereby preventing the dwindling away of scarce natural resources.
Then again, the economic system is constantly evolving globally and the barriers between trade and commerce are dissolving rapidly with each passing day. Therefore, the natural upshot is that the economies of various countries are entwined with each other. As a result, the metal coins and currency notes of one country need to be valued accurately vis-a-vis those of its trading partner, and finally the net transaction in physical form involves payment in the currency of another country. This cumbersome and error-prone situation can be resolved by having a central clearing house where the participating countries can reduce or add the appropriate figures and the transaction becomes more lucid and accurate.
Furthermore, the mandatory government regulations applicable to Finance sectors like Banking make it imperative to settle and close the transactions in a swift and legally compliant manner. Thus, the system of electronic accounts of credits and debits is perhaps the only one that can enable the involved parties to achieve the desired end-state.
Admittedly, the system of electronic accounts of credits and debits can also come with its share of problems as hacking by unscrupulous individuals, downtime in transactions owing to system failure or complexity in maintenance and upkeep. Additionally, the cost of replacing the existing Monetary system may turn out to be prohibitive. However, we ought to remember that any system comes with a string of attached issues, and the focus ought to be on how to make the system more robust, so that the end-goals are served without any serious compromise on economic and legal fronts. Also, the cost-savings gained from the reduction of the consumption of natural resources would be able to compensate for the cost associated with the set-up of new systems.
Thus, in summary, the replacement of the existing system of physical transactions in the monetary system of several countries in the world surely seems to be a fossilized one, and the same should be definitely substituted with the more dynamic and accurate system of electronic credit and debit accounts. With the rapid strides in the arena of technology and finance, and the changing perspectives and priorities of all the involved people, the replacement will definitely serve to facilitate and expedite the transactions accurately in day to day finance related activities.
