[burning cash fire protest greece]Alkis Konstantinidis/Reuters Physical currency is going extinct, according to Stratfor. In a recent paper, the global forecaster said that the world is on a march to a cashless society and even if there are setbacks the endgame is inevitable. "All of these trends, allied with the unstoppable progress of technology, will likely make cashless transactions ever more prevalent in the global economy, especially as the emerging economies of Africa and India embrace concepts such as mobile banking," said the note. The pronouncement was driven by a spat of news regarding the elimination of high denomination currencies. The euro zone is nearing a decision to eliminate the 500 euro note and Harvard professor Larry Summers has recently called for the end of the $100 bill in the US. Both moves are being presented as a way to combat criminal activity as few everyday transactions are done in high denomination currency. But according to Stratfor this is simply one part of a larger trend. "Obviously, technological advancements are making cash-free transactions easier than ever before, but there are also distinct structural advantages to a cashless economy that make it more appealing in today's regulatory environment," said the note. There were a 2 major economic shifts Stratfor highlighted: * NEGATIVE INTEREST RATES: With countries in Europe and Japan venturing into the never-before-seen area of negative interest rates, Stratfor said that a cashless society eliminates one of the biggest concern of the move. Theoretically, if banks charge consumers to hold money, then consumers will drain their account and hold everything in cash. "Electronic money eliminates this threat, of course, since money that cannot be held physically cannot be withdrawn," said Stratfor. "IN THEORY, THEN, A CASHLESS SOCIETY FREES UP CENTRAL BANKS TO EXPLORE AN ENTIRELY NEW SET OF FINANCIAL TOOLS, which could be useful in fighting the low inflation that has so far defied already unprecedentedly low interest rates." * THE RISING USE OF CAPITAL CONTROLS: "The link between capital controls and a cashless society is simple. A geographically remote country such as Iceland, an island in the middle of the Atlantic, can easily impose restrictions on the movement of capital. It is harder, however, to stop a determined Greek national from crossing the Bulgarian border with a backpack full of 500-euro notes. As more countries consider capital controls a possibility — and much of Europe must at least consider the possibility of finding itself in Greece's position — the attraction of a cashless society becomes stronger." Additionally, Stratfor said this would make it easier for countries to accurately track incomes, making tax dodging more difficult. There will be some pushback, the firm concedes, especially from countries that have had a traumatic monetary experience in the past (think hyperinflation in Germany after the World Wars). But the 500 euro note will soon be eliminated and in Stratfor's view, this will be just the first domino to fall. "Of course, widespread monetary trauma or a loss of faith in central institutions could drive citizens back to cash or even into gold, "the firm writes. "But such retreats will only slow the trend; they are unlikely to reverse it." NOW WATCH: How Marshawn Lynch — who hasn't spent a penny of his NFL salary — makes and spends his money
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