The pros and cons of paper currency

Paper currencies are the most widely used medium of transaction today. They are the replacement of metal coins which were popular at one time. While paper currencies have their own advantages, there are certain disadvantages as well. In this post, you are going to find out the advantages and disadvantages of paper currency.

Advantages of paper currency

Economical

The cost incurred in the production of paper currency is comparatively lesser than that of metal coins. This makes it convenient to produce more currency notes without having to worry about the expenses.

Convenient

Metallic coins are not the best things to carry around. Paper currencies, on the other hand, are light and you can easily carry them with you at all places. The strongest currencies in the world will tend to have bank notes of smaller demonitaions because they have greater purchasing power. 

Can be easily stored

Paper currencies need less space to be stored. You can store a large amount of money very easily in a small vault.

 

Disadvantages of paper currency

Oversupply

With currency notes, there is always a risk of oversupply. This can cause inflation in the country which is not good news at all. 

Durability

Compared to metallic coins, paper currency notes are not as durable. This means that you can’t use a currency not for a longer time.

Stability

Paper currencies are not very stable. This means that they are liable to changes as the authorities decide to do so.

Demonetisation

Paper currency notes can be demonetised at any point in time. Once demonetised, they don’t hold their value.




These were some of the advantages and disadvantages of paper currency. For more information on currencies, keep visiting this site. Here, you’ll find all the information about the highest currencies in the world.

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