Why a 'cashless' economy would hurt the poor: A lesson from India

India recently tried to reduce the use of cash in its economy by eliminating, overnight, two of its most widely used bills in what was called demonetization.

While the effort – initially explained as an attempt to curb “black money” – has been a failure in many respects, it was part of an ongoing and global push toward cashlessness.

What India and other governments have failed to contend with, however, is the adverse effect such severe policies have on the poor, who seldom use banks.

India’s working poor rely almost exclusively on cash, with about 97 percent of all transactions involving an exchange of rupees. With 93 percent of the country working in informal  Read More