Tag: war on cash

Sleepwalking Into a Cashless Society

Philip Lane, chief economist of the European Central Bank, recently expressed urgency for the need to develop a digital euro—also known as a central bank digital currency (CBDC)—to compete against stablecoins such as Tether and electronic payment systems developed by U.S. tech firms, such as Google Pay and Apple Pay. Not content with eliminating cash, now the goal of central banks is to eliminate any competing electronic payment system.

We’re sleepwalking into a world with digital currencies without any government coercion whatsoever. As a 51-year-old Generation Xer, I carry lots of cash in my wallet. I teach personal finance at the local university and recently asked a class of about 30 students if any of them had any cash. Not one of them had a single bill or coin on them. They use debit cards, credit cards, Venmo, and Apple Pay. As it turns out, cash usage among the 18–24 age cohort has declined from 28 percent to 13 percent over the last five years. Most like the convenience of electronic payments, even though studies show that people spend 12 percent to 18 percent more when using credit cards than cash. If the government does attempt to implement a digital dollar, there will be little resistance to it.

Currently, there is $2.36 trillion in U.S. currency in circulation. Of course, much of this is held outside our borders, owing to the dollar’s dominance as the global reserve currency. The most common denomination of U.S. currency is the $100 bill. There are more $100 bills in circulation than $1 bills. Many residents of foreign countries, such as Argentina, consider the U.S. dollar to be a store of value and a hedge against inflation and local currency depreciation. If the U.S. government ever decided to phase out paper currency, it would have far-reaching effects around the globe.

Promoters of a digital currency allege that it would cause a drop in criminal and illicit activity. That may be correct, or people may simply resort to another medium of exchange or barter. Philosophically speaking, virtue is not possible without the freedom of choice. If people can’t choose to misbehave, it does not make them virtuous. A society in which nobody has the freedom to misbehave is far more horrifying than a society where people actually misbehave. 

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Replacing Cash With Digital Dollar Would Pose A Grave Threat To Our Rights and Freedoms

The Bank of Canada has made no secret of its efforts to explore a Central Bank Digital Currency (CBDC), a “digital dollar” issued and controlled by the central bank. The Bank of Canada is not alone. To date, 134 countries and currency unions have explored a CBDC, and 66 countries are already in advanced stages of implementation.

In 2023, cash accounted for a mere 11 percent of total payments made by Canadians. Consumers increasingly tap their credit and debit cards at checkouts, send e-transfers, or use online banking to pay bills, make investments, and donate to charities. For many Canadians, metal coins function less like a currency and more like a locker or shopping cart token; paper bills are for birthday cards, not for “serious” transactions. New legislation in Quebec empowers law enforcement to presume that cash sums of $2,000 or more are the proceeds of unlawful activity.

While most consumers seem to appreciate the convenience of an increasingly digital economy, a CBDC is a radical change from using credit cards and online banking apps. A CBDC would likely lead to a cashless economy, in which all financial transactions can be monitored and controlled by government. A cashless economy would create severe hardship for people who are homeless, technologically illiterate, or without ready access to the internet.

For Canadians who look after their finances electronically, cash remains essential to protect their rights and freedoms, including their privacy, security, and autonomy. In a cashless economy, all transactions are digital, subject to surveillance, and ultimately subject to government control. CBDC opens the door for governments to reward or penalize Canadians for their personal choices on how to live, where to go, and what to do with their own money.

Governments can use CBDC to restrict when, where, and what people are allowed to buy, leading to a level of control resembling communist China’s notorious “social credit” system. China uses “social credit” to reward citizens who support the Communist Party and its rules and policies. Those who criticize the Party can find themselves unable to board a train, plane, or subway, denied a bank loan, or prevented from enrolling their children in the best schools and universities.

Cash means privacy and confidentiality.

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Justice Department Orders DEA to Halt Airport Searches Because of ‘Significant Issues’ With Cash Seizures

The Justice Department has ordered the Drug Enforcement Administration (DEA) to suspend most searches of passengers at airports and other mass transit hubs after an independent investigation found DEA task forces weren’t documenting searches and weren’t properly trained, creating a significant risk of constitutional violations and lawsuits. 

The deputy attorney general directed the DEA on November 12 to halt what are known as “consensual encounter” searches at airports—unless they’re part of an existing investigation into a criminal network—after seeing the draft of a Justice Department Office of Inspector General (OIG) memorandum that outlined a decade’s worth of “significant concerns” about how the DEA uses paid airline informants and loose criteria to flag passengers to search for drugs and cash.

OIG Investigators found that the DEA paid one airline employee tens of thousands of dollars over the past several years in proceeds from cash seized as a result of their tips. However, the vast majority of those airport seizures aren’t accompanied by criminal prosecutions. This has led to years of complaints from civil liberties groups that the DEA is abusing civil asset forfeiture—a practice that allows police to seize cash and other property suspected of being connected to criminal activity such as drug trafficking, even if the owner is never arrested or charged with a crime. 

The memo, released publicly today by the OIG, found that failures to properly train agents and document searches “​​creates substantial risks that DEA Special Agents (SA) and Task Force Officers (TFO) will conduct these activities improperly; impose unwarranted burdens on, and violate the legal rights of, innocent travelers; imperil the Department’s asset forfeiture and seizure activities; and waste law enforcement resources on ineffective interdiction actions.”

The OIG memo and directive is a victory for advocacy groups that oppose civil asset forfeiture, such as the Institute for Justice, a public-interest law firm that is currently litigating a class action lawsuit challenging the DEA’s airport forfeiture practices.

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The Regime’s War on Cash Could Destroy the Economy

According to some “experts,” there is an urgent need to remove cash from the economy. It is held that cash provides support to the “shadow economy” and permits tax evasion. Another justification for its removal is that, in times of economic shocks, which push the economy into a recession, the run for cash exacerbates the downturn—it becomes a factor contributing to economic instability. Moreover, it is argued that, in the modern world, most transactions can be settled by means of electronic funds transfer. Money in the modern world is allegedly an abstraction.

The emergence of money

Money emerged because barter could not support the market economy. A butcher, who wanted to exchange his meat for fruit, might not be able to find a fruit farmer who wanted his meat, while the fruit farmer who wanted to exchange his fruit for shoes might not be able to find a shoemaker who wanted his fruit. The distinguishing characteristic of money is that it is the general medium of exchange. It has evolved as the most marketable commodity. On this process, Mises wrote,

“…there would be an inevitable tendency for the less marketable of the series of goods used as media of exchange to be one by one rejected until at last only a single commodity remained, which was universally employed as a medium of exchange; in a word, money.”

Similarly, Rothbard held that,

Just as in nature there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. It is clear that in every society, the most marketable goods will be gradually selected as the media for exchange. As they are more and more selected as media, the demand for them increases because of this use, and so they become even more marketable. The result is a reinforcing spiral: more marketability causes wider use as a medium which causes more marketability, etc. Eventually, one or two commodities are used as general media—in almost all exchanges—and these are called money.

Since the general medium of exchange emerged from a wide range of commodities, money is a commodity. Again, according to Rothbard,

Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless token only good for exchanging; it is not a ‘claim on society’; it is not a guarantee of a fixed price level. It is simply a commodity.

Moreover, in the words of Mises, “…an object cannot be used as money unless, at the moment when its use as money begins, it already possesses an objective exchange value based on some other use.” Why must this be the case? Rothbard explains further,

In contrast to directly-used consumers’ or producers’ goods, money must have pre-existing prices on which to ground a demand. But the only way this can happen is by beginning with a useful commodity under barter, and then adding demand for a medium to the previous demand for direct use (e.g., for ornaments, in the case of gold).

Hence, money is that for which all other goods and services are traded. Through an ongoing selection process over thousands of years, people settled on gold as money. In today’s monetary system, the money supply is no longer gold, but coins and notes issued by the government and the central bank. This fiat-money still has exchange-value because of its prior connection with true money and the inertia caused by the fact that it is already accepted as a general medium of exchange. Consequently, coins and notes still constitute money, known as cash, which are employed in transactions. Goods and services are exchanged for cash.

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‘Digital Euro’ To Be “Most Private Electronic Payment Option”; ECB Claims

The digital euro will be one of the most private forms of electronic payment, according do a data protection official from the European Union. 

On Oct. 2, 2020, the European Central Bank (ECB) released a report laying the groundwork for its central bank digital currency (CBDC), the digital euro.

The digital euro has been in its investigation phase since October 2021, during which ECB officials and bankers hypothesized about its possible design and purpose.

As of November 2023, the digital euro has entered the preparation phase, with possible legislative adoption expected by the last financial quarter of 2024.

If the ECB can stick to its roadmap, digital euro use cases could roll out by November 2025.

Despite still being in development, the digital euro is already facing resistance over privacy concerns.

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Is this the end of 1p and 2p coins? Treasury orders NO new coins to be minted for first time amid decline in cash payments as officials consider scrapping coppers altogether

The Treasury has made no orders to the Royal Mint for new coins to be minted for the first time amid a decline in cash payments, with officials considering scrapping coppers altogether. 

No new 1p and 2p coins are expected to be ordered in the coming years with proposals being worked on to be put to ministers over the future of the coinage, reported the Evening Standard. 

If the coppers are scrapped it would be the first time a coin was taken out of circulation in 40 years when the half-penny ceased in 1984. 

The 1p and 2p coins’ future has been in a precarious state in recent years with Bank of England governor Mark Carney previously hinting they could be ditched as Britons increasingly move towards a cashless society. 

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The Real Reason Behind the Push for Digital Currencies and the Elimination of Cash

In recent years, there has been a noticeable shift towards digital currencies and the elimination of cash. Governments, banks, and tech giants all seem to be singing the same tune: the future is digital. But what lies beneath this harmonious chorus? Is it really about convenience and efficiency, or is there a deeper motive at play?

Control and Surveillance

One of the primary drivers behind the push for digital currencies is the unprecedented level of control and surveillance they offer. Unlike cash transactions, which are inherently anonymous, digital transactions can be traced, monitored, and recorded. This means that every financial move you make can be scrutinized. For those in power, this represents a significant advantage. It allows for the monitoring of spending habits, the detection of illegal activities, and the ability to track the flow of money with pinpoint accuracy.

With digital currencies, governments and financial institutions can gather a treasure trove of data. They can see where you shop, what you buy, and even your travel patterns. This data can be used to build comprehensive profiles of individuals and groups, providing insights into behavior and preferences. In essence, it offers a level of surveillance that was previously unimaginable.

Financial Control

Beyond surveillance, digital currencies provide a mechanism for enhanced financial control. Cash is tangible and can be stored privately, away from prying eyes. Digital currencies, however, exist in a realm where access can be controlled and restricted. This means that in times of economic uncertainty or political unrest, governments can exert control over digital funds in ways that are impossible with cash.

Imagine a scenario where access to your money could be limited or frozen with the click of a button. This could be justified under the guise of preventing crime, terrorism, or even managing economic crises. The reality is that it gives those in power an unprecedented tool to control the populace. In extreme cases, this could be used to suppress dissent or force compliance with governmental policies. Even more concerning is the potential for governments to cut off access to funds as a way to control speech. If you speak out against the government or engage in activities they disapprove of, they could simply restrict your access to your own money, effectively silencing you by limiting your ability to function in society.

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Prosecutor Fani Willis Touts the Value of Cash, But What About the Rest of Us?

It’s quite a turn when a prosecutor defends the use of cash for financial transactions. After years of authorities treating mere possession of physical money as sketchy and grounds for seizure, this week a law enforcement official claimed there’s nothing to see in her alleged cash reimbursements to her boyfriend for an enviable lifestyle arguably funded by the taxpayers. Either Fani Willis and company were right in the past and she should be subject to scrutiny for anonymous transactions, or she’s right today and she and her colleagues owe the rest of us a pass on our taste for financial anonymity.

If you haven’t kept up on the details, Fani Willis is the Fulton County district attorney overseeing the Georgia election interference case, which has been described as potentially the strongest and most consequential case against former (and maybe future) president Donald Trump. At least, it was described that way until defense attorneys revealed that Nathan Wade, a special prosecutor in the case, is unqualified for the job, was romantically involved with Willis, and is being paid much more than any of his colleagues (around $654,000 in all)—money from which Willis seemingly benefited in the form of expensive vacations and other pleasures of life with Wade.

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Gates Foundation Wants Help to Create Digital ID and Payments System

“Financial inclusion” seems to be the buzzword that proponents of digital IDs, payments, and data exchange have picked for their PR sloganeering in favor of something that is, objectively, very controversial.

And where better to “test” something of that kind than among those who due to their economic circumstances don’t have much of a say – like a number of African countries.

But don’t expect those behind the effort, juggernauts like Mastercard or the (Bill) Gates Foundation, to ever spell it out in those stark terms. After all, it’s genuine concern for other humans, equity, equality, and kindness that’s been behind the billions, if not trillions of dollars they have amassed thus far, right?

Clearly not.

But what are they up to now?

“Stakeholders” they call themselves – self-appointed though, and their goal – other than, ostensibly, to keep the “global south” in check – is to make sure that digital public infrastructure projects, “including digital IDs,” get as much traction as possible in developing countries (first).

Both Mastercard, and the Gates Foundation, are telling us this is part and parcel of their selfless global fight against poverty and other ills plaguing humankind.

Their resume, though, these last couple of years/decades, does speak for itself – specifically, otherwise.

Right now, Mastercard, that little person’s best friend /s, has come up with something called Community Pass. “Farm Pass” – apparently a “sub-project,” is another term being thrown around.

Reports say it’s “a platform for digital IDs aimed at individuals such as business owners and farmers.”

And wouldn’t you know it, it’s one that happens to focus on African countries.

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Federal Reserve: desire for cash-like anonymity for digital assets based on ignorance

The Federal Reserve published a paper that explores various privacy strategies in digital asset ecosystems. A key point is that cash like anonymity is very unlikely in digital systems. Confidentiality from certain parties is the best to hope for.

It asserts the desire for cash-like anonymity is based on a misunderstanding of how digital systems work. Even with encryption, activity logs and audit trails leak small pieces of information. Of course, current versions of most public blockchains reveal an enormous amount of data which is easy to link to an identity by tracing wallets back to exchange onramps.

Although it may be true that anonymity is almost impossible to achieve in the digital realm, people desire it. While comparing digital systems to cash at a practical level, the paper doesn’t acknowledge the broad recognition that digital money will accelerate the crowding out of cash.

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