I was listening to CBC
(national Canadian broadcaster) this morning and caught a segment
about adoption of electronic payments. The 'expert' said some
shocking things in his case against traditional physical cash,
talking about paper/coin cash.
“Cash it no longer used for traditional commerce. Its domain is increasingly crime, money laundering, terrorism”
(exact quotes) “Cash is generally not contributing positively to society ... of course some people will still want to hold onto cash: drug dealers probably, prostitutes”
And therefore, he goes on to describe, we need to use more electronic payment methods. Sure these transactions are more easily tracked. Less privacy and more government control, certainly. But hey - you're not a drug dealer or prostitute right?
Personally, I like cash and find these arguments very worrying:
Cash is at least somewhat physical. Its value may inflate away, sure, but you can still hoard it and put it in a safe. The banking system does not like this. Paper cash puts you in control of your own liquidity. You don't have to lend it to a bank or rely on that bank being solvent. Remember that every checking/savings account is a loan to a bank.
Tracking and monitoring. Digital currencies are traceable and authorities love them. I've analyzed Bitcoin, and it's not actually anonymous. It's feasible to envisage a court case in which police have reverse engineered all Bitcoin transactions someone has made, because the encryption keys used become a traceable signature.
Electronic cash is damned easy to steal! Protocols are based on algorithms, which can usually be cracked. And more importantly, implementation in software becomes a big factor. I don't want to risk losing thousands of dollars because of software and hardware weaknesses.
The anti-cash crowd is referencing 'crime' and 'terrorism' a lot . See above, also prostitution. Generally when you see this kind of manipulative appeal-to-morals, you know something is awry. “You're not a criminal right? So why do you need to use cash?”. It's a similar argument to “if you don't have anything to hide, you shouldn't mind being searched without a warrant”.
Western banks have already started restricting cash use. It's harder than it used to be to make large cash withdrawals from banks (just try withdrawing $10,000 and see what happens). ATM daily withdraw limits are also tighter, and a couple Canadian banks I deal with even automatically reduce daily ATM limits without notice. A lot of this has to do with the poor solvency of western banks, but they always reference 'your safety' when restricting your access to cash!
- Perpetual Bull, email@example.com