The Cashless Society Beckons

There is ever-increasing evidence that the world is fast transitioning to a global cashless society. Individual countries are consistently making changes that work towards replacing cash with all sorts of electronic, biometric or technological options.

Whether that's good news or not would depend on who gets asked. However, various indicators arising out this trend towards cashless societies point clearly towards what we can expect to see happen.

Sarah Jeong in a recent piece for theatlantic.com titled 'How a Cashless Society Could Embolden Big Brother' noted that Cass Sunstein--one-time "regulatory czar" for the Obama administration--wrote an op-ed advocating for a cashless society, on the grounds that it would reduce street crime. Essentially the absence of money would leave thieves with no physical cash to steal and limit the incentives for robbery.

There are other reasons too why many observers and stakeholders feel that the days of cash as a medium of exchange are numbered, or at least endangered. Kyle Torpey in a recent write-up published in nasdaq.com gave a list of several more:

" Negative interest rates - In a cashless society, it would be more difficult for savers to avoid these negative rates, which would be viewed as a positive by central banks around the world.

" More control over the citizenry's money - There are a variety of other government policies that are only made possible - or at least more practical - by the digitization of money. It's much easier to pull off a bail-in, enact capital controls, collect taxes and generally control where money goes when it's all ones and zeros in a centralized ledger.

" Terrorist financing, money laundering and other bad things - The reported use of the 500 euro bill by terrorist organizations and other bad actors is the main reason its existence is currently under review. Physical cash's anonymous nature makes it attractive for illegal economic interactions. A completely digital monetary system would allow governments to track every fiat-denominated transaction with precision.

" Convenience - Digital payment options are also simply more convenient than cash. The Internet allows individuals to send money across long distances, and swiping a card is less cumbersome than fiddling with nickels and dimes.

" Lower costs - Issuing digital currency also comes with lower costs than printing physical cash.

There are certainly some downsides to replacing cash. As Jeong noted, in a cashless society the cash has been converted into numbers, signals, and electronic currents. In short: Information replaces cash - but wherever information gathers and flows, two predators follow closely behind it: censorship and surveillance.

 

Not good news especially for privacy advocates, so is there any hope for those who wish to escape the disadvantages of operating without cash? Apparently so - Torpey notes that as a digital asset Bitcoin, and other cryptocurrencies have the potential to help individuals fight against the potential downsides of a cashless society.

Bitcoin allows individuals to avoid payment censorship, fiat currency devaluations, heavy taxation, bail-ins, capital controls, financial surveillance (once privacy improvements are added), and many other negative aspects of virtual fiat currencies.

Unlike gold, Bitcoins can be transferred to anyone else in the world who has access to the Internet in a matter of minutes. Governments also have a tendency to shut down gold-backed virtual currencies, which is one of the reasons Bitcoin was created in the first place. 

Bitcoin is however not without its own flaws. As Torpey noted, price volatility and the complexities involved with simply understanding how Bitcoin works are two disadvantages of the system - at least in the eyes of the general public.

Guillaume Lepecq in a recent report for usnews.com is among those who would disagree with the drive to eliminate cash. He cited other dangers that a cashless society could spawn, including:

 

"  Losing your credit cards or being the victim of digital hackers can lead to a whole host of problems including denied payment, card theft, card skimming, identity theft, account takeover, fraudulent transactions and data breaches.

" Each of those incidents leads to countless hours of dealing with financial institutions and law enforcement to try to gain access back to accounts, redress fraudulent activity and reclaim one's own identity.

" Cash has repeatedly demonstrated its importance in times of crisis. When natural disasters knock out an electrical grid for days or even weeks, cash is a saving grace for residents to obtain critical supplies.

" Internationally, cash has become a key target in the fight against terrorism. When there is actionable intelligence on where terrorists keep their cash, the military can strike and destroy those locations and put a significant dent in the terror groups' ability to operate.

Nonetheless, cashless options and their inherent conveniences still seem to carry the day in most Western nations - even though the nagging issues of privacy management are never far behind. One example was given by Jackie Calmes in a report for the nytimes.com that quoted Matt Bretzius, 31, the president of FischTank Marketing and P.R. in New York:

 "I very rarely see cash exchanged, even for just three bucks," he said. When he was forced this month to use cash for several days after his credit card number was stolen, it "was sort of a weird, dirty feeling".

Still, the thought that the U.S could turn totally cashless sooner rather than later has its critics. "We may be a cashless society one day, but not as soon as some imagine...Many Americans remain unbanked, making electronic payments impossible. And as long as there are babysitters, bellhops, doormen, street vendors and Christmas stockings, there will be cash," Mark Patterson, a former Treasury chief of staff, wrote in an email.

Meanwhile, even in countries considered 'developing' or '3rd world', the march towards eliminating cash continues to make progress. 

RBI Governor Raghuram Rajan along with National Payments Corporation of India (NPCI) adviser Nandan Nilekani launched the Unified Payment Interface (UPI) with the objective of proactively encouraging electronic payment systems for ushering in a cashless society in India. 

The interface aims to provide a safe, efficient, accessible, inclusive, interoperable and authorized payment and settlement system for the country. It will enable anyone with a bank account to complete a transfer or make a payment without having to share bank account or credit/debit card details. 

This news compilation about the UPI by Ranjeet Rane was recently published in the hindustantimes.com and is an indicator that this trend towards replacing cash is certainly not limited to the West or the richer nations.

So what's the 'end game' here? Is there one, over and above what cashless society proponents have publicly stated? Is there something that the public is not being told? Trunews.com financial blogger David Haggith thinks the global central banks push toward a cashless society is linked to warnings in Bible prophecy against taking the Mark of the Beast in the end times.

Haggith predicted from his analysis that a single global currency would emerge throughout the globe, with little to no dollar influence as to appease Russia and China who want the US currency dethroned.

Haggith did not have a timeline for when he believes this cashless society will emerge, but believes it will require a big event to happen to undermine resistance against a formulation of the Mark of the Beast. This resistance he said will likely to come from the older segment of the population.

When asked by Rick Wiles of trunews.com if he believes it's reasonable for this system to emerge during his lifetime, Haggith said he did believe it was possible and that he could see all the events of Revelation play out before his death.

Wiles on his part has previously been quoted on the topic: "When the calendar flipped over to 2016, the establishment news media in the USA, Canada, Great Britain, Europe, and Australia immediately began chanting the 'here comes the cashless society' mantra.  The coordination of the propaganda campaign is glaringly obvious to any astute observer."

No wonder that many observers believe that a global financial crash is in the offing and those in the know are trying to prepare society to embrace it. Such an event could easily precipitate the setting up of a global cashless society - much faster and more effectively than most pundits could currently imagine.