India recently announced that the 2000 Rs/- note will no longer be valid from September onwards. The denomination was brought in the market in 2017, which has just been 6 years back and now they want to withdraw. Is it a joke that the government is making. To print money any time and introduce and withdraw it whenever they want. Not even a decade for this denomination and it is being withdrawn.
To think of it, there is a huge cost to print money, which goes from the tax payers pockets. and then that money where such a huge cost is incurred to print becomes obsolete. In 2017, overnight the government announced that all the 500 Rs and 1000 Rs notes in circulation will no longer be a legal tender. A country of 1.4 billion population, can you imagine the kind of chaos that people had to go through. It was all in the name of recovering black money, which never came out later. People were standing in hours at the banks to get their old notes changed. There was a limit for the exchange of old notes and it was a messy situation.
In the remote locations people suffered more, in these places there are daily wage earners who get their wages in cash and in those areas the banks did not even have enough of new notes to exchange. If the Government had no intention of continuing with the 2000 Rs. note then why did they have to bring in to the circulation in the first place. The Reserve Bank of India must have spent a huge amount of money to print these notes and who bears the brunt of this cost.
It's not only that, this also shows the volatility of the fiat currency and the power that the government holds over it, they can discontinue it at any time and your money can be gone. When they introduce the CBDC there will always be a risk of losing our money, and in CBDCs one will have absolutely no control as it will be all digital and completely under the government's control to confiscate it at any given time.
It's good that now we have options to not rely on any form of government currencies. Cryptos are an answer to that but still it is not being used for day-to-day living expenses and that will take time. Till then dependability of fiat currency will still be there. At the same time, one should look at making investments in Cryptos to not have entire dependability of the financial portfolio on any form of Government currencies. This type of government actions will always scare people to keep money in cash form and they will be forced to keep their money in banks.
People get angry but who cares for that, and nowadays if people get angry, they make some reels on social media and that's it, the matter ends by talking. There is no action and this always gives the Government an upper hand to do things the way they want. They are very well aware, that at the most people will talk, show agitation, get angry and eventually become quiet. This continuous churning of money is a scary situation for any economy.
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