I predict an ideological war in the near future, where people fight for their right to use hard cash. Around the globe the trend is to nullify the use of hard cash. The same old mantra will be used – if you have nothing to hide, it shouldn’t be a problem.
Check out this press release:
New York, 24 September 2012 — The Ford Foundation announced its partnership in founding the Better Than Cash Alliance, an initiative launched jointly with Bill & Melinda Gates Foundation, Citi, Omidyar Network, USAID, U.N. Capital Development Fund and Visa Inc.
The Better Than Cash Alliance works with governments, the development community and the private sector to adopt the use of electronic payments and provides resources to those who commit to make the transition. The Alliance has the potential to play a critical role in advancing democratic and accountable government, economic fairness and financial inclusion.
Already, the governments of Peru, Kenya, Colombia and the Philippines—along with development organizations USAID, the United Nations Development Program, the World Food Program, Mercy Corps, CARE USA and Concern Worldwide—have committed to digitize their disbursements and payments to people living in poverty, thereby becoming eligible for technical and financial support from the Better Than Cash Alliance.
Unless you have a Cloaker viewpoint, it all sounds perfectly reasonable. And most of the partners are non-profit organizations and charities (although there’s a few banks there too…)
It might be genuinely well-meaning (except for the banks – they will definitely profit from not dealing with grubby cash). The big problem is that digital currencies are:
- Traceable – totally. Zero privacy.
- Forgeable – a forged painting can be detected. Or a signature. But digital ones and zeroes are all the same.
- Analyzable – simple algorithms can uncover potential non-conformist folk.
- Taxable – without delving into the pros and cons of black markets, they would disappear if cash disappears.
- Vulnerable – a massive solar flare or terrorist action could delete all electronic records. I suspect that hard-copy records are rarely made.
In case you think that your right to deal in cash is absolute, check out how our world is changing:
- Spain – 2500 Euro limit on cash transactions (2012)
- Mexico – a variety of measures. For real estate transactions, cash payments of more than a half million pesos ($38,750) will be forbidden and, for automobiles or items like jewelry, art, and lottery tickets, cash payments of more than 200,000 pesos ($15,500) will be forbidden. Limits on foreign exchange cash transactions to $1,500 per person per month. Financial institutions will also be required to report monthly credit card balances in excess of 50,000 pesos ($3,875). (2012)
- Italy – The government on Dec. 4 reduced the maximum allowed cash payment to 1,000 euros from 2,500 euros. (2011)
- Russia – Russia may ban cash payments for purchases of more than 300,000 rubles (around $10,000) starting in 2015.
- Greece – From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards.
