Final answer:
Countries are replacing paper cash with polymer cash due to its enhanced durability, security features, and resistance to counterfeiting. This shift coincides with a broader trend towards digital payment methods and electronic money as the global economy continues to evolve and integrate new technologies.
Step-by-step explanation:
Countries may opt to replace paper cash with polymer cash for several reasons. Polymer banknotes offer enhanced durability, greater resistance to counterfeiting, and can incorporate advanced security features such as diffraction grating and thin film interference effects. Australia was the pioneer in the use of polymer substrate for its currency, making it difficult to forge with its unique security features. Following Australia's example, other countries like New Zealand and Taiwan have adopted similar technologies. In comparison, the United States currency also leverages security features like thin film interference to protect against counterfeiting.
With the advent of COVID-19, there was a noticeable shift away from physical currency due to the scarcity and fear of contamination. This accelerated the transition towards digital payment methods such as credit/debit cards and fintech solutions. As the global economy evolves, the transition away from commodity money to fiat money, which is declared as legal tender by government decree, becomes more evident. The growing integration of technology in financial transactions signifies a decreasing need for paper currency and a greater reliance on electronic forms of money.