Cashless in Singapore

A cashless economy may disrupt not just businesses, but the political landscape as well. Can a crypto-currency upset the current political hegemony?


by Kumaran Pillai

Temp staffs run out of cash a week before payday and employers need to advance salary so that they’ll have enough cash to come to work. Startups run out of cash before they launch their minimum viable product and cash strapped young couples delay parenthood, while others miss out on parenthood completely.

A common thread is emerging in Singapore but the Singaporean government has lofty ambitions of doing away with dollar bills and to move the entire nation to a form of digital-crypto currency, a move that is likely to backfire, according to many.

There is a hue and cry about it from all quarters from former Nominated Member of Parliament, Mr Calvin Cheng to opposition stalwart Tien Lim. The latter calls the PM’s NDR speech, a banal one.

Evidently absent from the PM’s speech this year is about the issues surrounding Pedra Branca and South China Sea and our need to balance our interests between the two powers, China and the USA. It has been a thorny issue and the prime minister has conveniently skipped this in his national day rally speech.

There is obviously more to come, in terms of goodies of course, and we’ll hear about it in next year’s budget about how diabetics will get more benefits from the government – it represents 10% of our voter bank and young parents represent a large chuck as well.

And the PM goes on social media to say he is no Wonder Woman to derail the criticisms about his NDR speech.

Goodies for the next General Elections

Why dwell on thorny issues when he can have a head-start for his next general elections? A shrewd political move and with over 80% of the people being either positive or neutral about the NDR, the speech by all accounts is a success for the ruling party.

The pre-school goodies are like the Pioneer Generation Package and it is targeted at a significant voter bank. And I won’t be surprised if the government gives out health benefits or provide subsidies, in the coming months, for diabetics as this accounts for another 10% of the voter bank.

While the WP is besieged with town council issues, the PAP sets the ground for the next elections. Well played!

Robbing Peter to Pay Paul

However, there are many issues with this. While the government entering the pre-school sector benefits young parents and it may ease their burden a bit, it also crowds out existing pre-school operators and it may eventually kill those small operators.

Which brings me to my next point about our country’s lack of innovativeness.

Lack of business and political innovation

I’ve spoken and written about this on many occasions, at a macro-economic level, our chronic budget-surplus is hurting entrepreneurship and small business. Each year, more money is extracted through taxes and the government will have to come up with new methods to “prime the economic pump” through various subsidies.

It is par for the course and make no mistake, PAP is not doing this because SDP wrote about it in their blog. They do have a huge war chest through years of accumulation of reserves and they are well equipped to implement all sorts of social programmes. Putting money back in the circular flow of income is what the government does. Our opposition parties are nothing more than a back-end-behind-the-scenes policy institute.

So, we have government that is economically liberal but socially conservative. And I know that this is in sharp contrast to what most of us think of PAP – that it is a right leaning economically conservative party. That was probably the case maybe 10 years ago. But PAP has gradually moved left of centre.

It will be interesting to watch how the opposition parties are going to respond- if they’ll be forced out of their left-leaning position and because there’ll be no or little differentiation in terms of offerings during elections.

Campaigning along class-divisions and social inequality will be difficult in an affluent country like Singapore and often this will fall on deaf ears because most middle-classed Singaporeans are making enough to get by. And any call for more universal suffrage will not stick either.  People are generally contended to get on with their lives when all their economic needs are met.

A cashless economy may disrupt both economy and political status quo

But going cashless – now this is a big thing and it’ll be interesting to watch the space because it’ll affect everybody, rich and poor. The rich will not be able to stash excess cash away from the banking system and so they’ll end up paying more taxes. It’ll make them not only relatively poorer but less supportive of PAP.

The poor on the other hand can no longer keep their cash under the pillow for rainy days. And those operating in the black economy like the street walkers will find alternative currencies that still exist, maybe even Renminbi for instance and small business owners might just do the same.

It’ll be interesting to see how this thing is going to pan out in Singapore. Meanwhile in India, the Supreme Court has warned that a cashless economy may lead to riots.

Cashless economy in India: there might be riots, the Supreme court warns




  1. India and China are ahead when going cashless. Why are they ahead? The government aim is to ensure that corruption is eradicated. Now why is government hesitant about going cashless? Why took them a long time?

    • Kevin Kong Lame excuse. We don’t need government to be part of the cashless program. WeChat is not governmental and its cash payment gateway is working well. Don;t count on our government. When the cash payment system breaks down they have reason to blame on signal system fault

  2. not at all..being cashless means admins dont have to print money, thats saving costs for them…citizens will give them real money, they just need to key in any figures into your acct, which precisely is only now, cos country is broke…

  3. Cashless… Bring the transaction fee down first lah. Read that even NETS transaction fees went up from 0.45% to 1.8% from July. No wonder I was wondering why Four Leaves only accept cash below $20 when I bought some bread. Imagine you need to pay the banks $18 for every $1000 transactions if you go cashless. No way for small businesses.

  4. For a layman like me, a cashless economy means that I will never ever get to see and touch my CPF savings even if I live till the withdrawal/draw down age of 65.

  5. Smallness is the main hurdle. Setting up and maintaining all the hardware for going cashless cost money. To be profitable they will have to levy commission for transactions. To encourage retailers to take up the terminals, fees or commissions need to be competitive. How low can they go is the question?


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