There has been a lot of talk over the past few years about moving toward establishing a cashless society. A number of economists, business professionals (like Apple's Tim Cook), financial experts, and central banks, have suggested that this would be a good idea, insisting that such a society would cut back on illegal money laundering and criminal activity and offer more convenience to individuals. But some worry that by having a cashless society that it would allow financial institutions and the state to be able to block financial access to any business or organization. And there are also worries surrounding privacy and transparency of exchanges, and concerns that such a cashless society would prevent people from being able to give financially to those in need.
The decline of cash has become so prevalent in Sweden that we've now seen the introduction of homeless people using credit card readers that were handed out by charities, in order for them to take donations.
Previous attempts by the state and private financial institutions to try and crackdown on money laundering has in-turn cut off access to financial services for a number of legitimate charities, businesses, and individuals. If the people no longer had any cash and instead were forced to go through a centralized institution, then we would need to assume that every transaction would receive due process, but of course we have seen in the past that this isn't the case and there are circumstances where a number of mistakes can happen that cause a tremendous amount of damage to the lives of innocent people.
The use of "assert forfeiture" laws alone have already demonstrated how many mistakes can be made when the state, along with financial institutions, chooses to lock or remove the funds from individuals before ever charging them with any crime. The seize first ask questions later approach has caused tremendous amounts of problems for a number of families, individuals, and businesses around the U.S.
Who Really Helps Fund Crime?
It has been argued that the case for cutting back on crime by eliminating cash is one that is overstated. Why? Because it looks like funding for criminal organizations actually comes from regulated institutions like HSBC and others. Not to mention the various governments themselves that are funding “freedom fighters” and other military endeavors overseas, putting resources in the hands of what many see to be nothing more than common criminals.
A risk assessment of money laundering and terrorist financing that was conducted last year, determined that criminal financing was much more likely to come from big financial institutions that are actually regulated. They are seen to pose the highest risk of facilitating either the storage of or the movement of funds related to crime. If we are going to operate under the logic that we should ban whatever contributes financial support to crime, then why aren't we considering banning the big banks?
A cashless society would also benefit an environment with negative interest rates as well, because the financial institutions would have more control over people's resources. It would allow financial lenders, like those caught helping to finance terrorism and other criminal activities, to discount or seize the funds of their customers. It works as a tax on savings accounts so that people are forced to spend their money rather than hold onto it and receive the decreased value of it. And it would help the state to keep track of every transaction that people make so that they were sure never to miss an opportunity to take their cut. Like when you decide to post an old cell-phone or sofa on Craiglist to sell for example, the state wants a piece of this income. The introduction of a cashless society would permit the government a new level of control and power to exercise over all human behavior.
Is A Cashless Society A Free Society?
Freedom is about personal choice and in a free society people should be allowed to choose whatever medium of exchange they want to use in order to peacefully exchange with other people. Whether that is cryptocurrency, precious metals, food, paper, or some other item, the people should be free to decide for themselves what they want to use. Diminishing their options by force then, doesn't seem to be very indicative of a society that embraces or encourages freedom for the individual.
Is it really safe to assume that those who are pushing for a cashless society, are doing so because of their worries over the funding of crime? Crime has been going on for thousands of years and it's not clear how taking away cash is going to change that. And if that is our honest concern behind this cashless agenda, then why is the same logic not being applied to financial institutions which are found to be involved with criminal activity, terrorism etc? Taking away cash doesn't equate to ridding society of criminality, because criminals can very easily turn toward using a different medium of exchange if the idea of using cash becomes too unappealing to them. Currency has changed many times throughout the years and even today around the world people use a variety of items as 'money' when they exchange with others: pieces of paper, cigarettes, noodles, cryptocurrency, and more.
Current Trends...
A recent report, The Health Of Cash Study by Cardtronics, suggests that we might not see a cashless society anytime soon, as the majority of shoppers seem to be heading back to using cash when making their exchanges. The report found that at least 89 percent of consumers were using cash, compared to 74 percent using debit cards, and then credit cards at 66 percent. Consumers overwhelmingly, 83 percent, reported that privacy and data concerns were playing a big part in their consumer decision making to use cash.
There are other reports however that suggest the trend toward a cashless society is snowballing and it's a possible reality that we might come to see fulfilled in the not too distant future.
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Sources:
https://www.bloomberg.com/view/articles/2016-10-14/the-cashless-society-is-a-creepy-fantasy
http://www.afr.com/opinion/columnists/why-a-cashless-society-would-be-a-nightmare-20161017-gs3twj
https://www.theguardian.com/commentisfree/2016/oct/21/cashless-future-apple-tim-cook-smartphone-apps
http://www.independent.co.uk/news/world/europe/stockholm-homeless-accept-credit-cards-as-cash-king-no-more-8910867.html
http://www.cnbc.com/2013/12/12/cashless-society-a-huge-threat-to-our-freedomcommentary.html
http://www.chainstoreage.com/article/cashless-society-not-happening-anytime-soon
http://www.visualcapitalist.com/shift-cashless-society-snowballing/