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Is a debate about cashless economy possible?

By       (Page 1 of 1 pages)   2 comments
Message Harvey Rubin

Discussions surrounding the nature of the ongoing trend, in which our economies are slowly getting rid of cash, have risen consistently in their magnitude. An increasing share of the population is taking positions regarding the matter, with arguments pro and con. But the most interesting part of the debate lies not in what is being said within the debate, but in what is being hushed.

The slow demise of cash

There is nothing new about the trend: in fact, it probably started without anyone deciding, or even noticing it. Merely a hundred years ago, cash was being used for just about everything, save very large transactions which we be carried out with banking documents, such as checks. With the arrival of credit cards in the 1970s, and then of electronic payments with the rise of the Internet, the share of payments made in cash slowly waned, without anyone taking notice. "Non-cash payments have increased in volume due to the rise in adoption of digital payment services across all market segments" Christophe Vergne, cards and payment practice leader at Capgemini, told CNBC. However, while cash was initially left aside in favor of alternative options, according to the situation in which the payment was being made, it would appear the phenomenon has lost its spontaneity : various entities, public and private, have understood how lucrative it would be if they were to push this societal shift all the way and outright forbid citizens using cash.

The pro arguments

The advocates of cashless societies are public and private organizations. Various government entities criticize cash and blame it for every woe in the world. Law enforcement say cash is used by criminals for covert transactions, and fiscal agencies presume that any cash operation is potentially fraudulent, such as tax evasion. Economic journalist Alanna Petroff reported in 2016 that "The European Central Bank announced Wednesday that it will phase out the 500 euro banknote because of concerns that this banknote "could facilitate illicit activities." Central banks also blame cash for the lack of control which this type of currency enables, meaning that they have sub-optimal feedback on the results of their various economic measures. In the private sector, all banks and electronic payment providers are favorable to the death of cash for simple business reasons: the fewer transactions are made with cash, the more will be made using their networks, thus increasing their profits. Banks are also fearful of bank runs, when they lose their clients' trust: with no cash, customers would be trapped within the banking system.

The con arguments

The voices rising against the cashless revolution are many and come from all walks of life. Poverty-fighting charities warn that the poorest segments of our societies traditionally rely exclusively on physical currency, and that a cashless society would further exclude them. The same argument applies to the elderly, whose skills using electronic devices doesn't equal that of the younger generations. Guardian reporter Rhiannon Cosslett writes: "We've all seen an elderly man or woman get flustered at the till when they are counting out their change to make a purchase. There's an increasing pressure on us all not to "waste time" and to get on with it. But what if your only human interaction that day was a chat with the shopkeeper? Where does that leave you?" Civil rights watchdogs are also extremely defiant of the trend, as it will yield governments total and absolute power of their citizens' economic lives. Electronic payments inform banks, and the governments they answer to, of every single aspect of a person's dealings: the identities of the people involved in the transaction, the time, the location, the object of the transaction, etc. Political analysts, in a nutshell, fear that a convenient and cashless world is the bait towards an irreversible tyranny.

Finally, environmentalists find the matter dubious: whereas a paper bill is produced once, and will support countless transactions with no carbon footprint whatsoever, electronic payment networks are incredibly power- and resource-hungry. The constant rise of connectivity in our lives, much of it coming from economic operations, is placing a demand so high in energy on our power networks, that keeping the consumption under control is one of the largest challenges which operators must face today.

How come there was no debate at all, for a long time?

This may be where the love was lost between citizens, on the one hand, and corporations and governments on the other. Initially, going cashless was a free choice for all citizens: as markets increased their payment options, they could choose whichever was most convenient. But as banks and governments slowly put the squeeze on cash, with limits on cash payment, caps on trans-border cash transport, limits on bank withdrawals, etc., the entire matter was kept under radio silence. Watchdog Tyler Durden writes: "Government campaigns of intimidation like the wars on drugs, terror, and poverty have been used to extort the public for decades. Despite the previous failures of institutional "wars," a new war on cash is being waged that threatens freedom in a more subversive way than ever before." This gave the impression to citizens, that their freedom of choice was being curtailed behind their backs, and that they were slowly being boxed in by a creeping and disloyal reform. Whichever the angle considered, a very vast majority of citizens and journalists express fear at the trend, and feel that their freedom is at risk, hence the opposition

It appears quite clearly, from the early-on phase of the trend when things were done "under the radar", and from the current situation where most voices addressing the cashless revolution are hostile to it, that cashless societies would very presumably benefit States and corporations, and not citizens. Will governments balk, facing popular opposition, as Sweden seems to be doing? Or will they press on, risking their citizens turning to crypto-currencies and losing total control over their economies?

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Is a debate about cashless economy possible?

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