“Sleepwalking” into a cashless society: could cryptocurrency help?

Voices in the independent media have been warning about the dangers of a cashless society for decades, but these concerns seem to be going more mainstream.

A report chaired by the former financial ombudsman Natalie Ceeney warns that the UK could “sleepwalk into a cashless society”. The Access to Cash Review, which surveyed 2000 people and took evidence from 120 organisations, says 74% of people are concerned that going cashless would take away people’s right to choose, while 72% believe it would put vulnerable groups at increased risk of getting scammed or defrauded.

The Access to Cash Review has received extensive coverage in the mainstream media, with figures including Martin Lewis, founder of MoneySavingExpert.com, and Jenni Allen of Which? Money warning that people need to have the option of cash.

Ben Broadbent, deputy governor for monetary policy at the Bank of England, and Nicky Morgan, chair of the government’s Treasury Committee, provide more nuanced statements, warning against an unmanaged decline in cash. Morgan said, “It’s right that this topic is being rigorously analysed before events overtake us,” – as if it was a done deal.

Only 15% of payments in Sweden are made using cash

And things certainly seem to be going that way. Already in Sweden only 15% of payments are made using cash, and the country’s central bank has forecasted that Sweden could be cashless within a decade.

When cash payments become this infrequent, it will be more difficult to spend cash, with fewer retail outlets accepting cash payments. Where would that leave homeless people, or people on the fringes of society? It will inevitably lead to tighter controls on all kinds of behaviour.

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Personally speaking, I find myself using the contactless function on my debit card increasingly often, out of pure laziness. It’s so convenient. I am aware of the dangers – if I lose my card, for example, it could be instantly used to the value of £30, without the requirement of my PIN number. Contactless payments make it so much easier to spend without using cash.

A couple of years ago I travelled through London by train, and then tried to take a bus. However I was unable to pay the fare with cash – only a local Oyster card was accepted. I ended up walking. Buses where I live now accept contactless debit card payments, which is so much easier than having to find exactly the right amount of change.

This is how the sleepwalking starts!

It does seem to me that this move away from cash is going to happen sooner or later, and I see cryptocurrency as having an important role to play here.

The biggest danger I see in this move towards a cashless society is the increase in control over our finances by the banks and by government. It would make it easier for these institutions to get hold of our cash, by withholding it from us or by the imposition of taxes or negative interest rates.

Negative interest rates are effectively a means for banks to charge us for holding our own money.

Control

It would also increase their power over us, manipulating people into doing certain things or behaving in certain ways by controlling their access to cash.

Cryptocurrencies could offer alternatives to this, providing alternative means of exchange – especially if they could be used as local currencies. I’m sure there will be a lot of opposition to this. And for this reason I believe it’s something that has to be put in place as soon as possible.

What can I do about it? I’m not a developer, but by using crypto as often as I can as a means of payment, and by accepting payments in crypto, I can contribute to this shift.

While researching this post, I stumbled across this post from @connecteconomy. It references a newspaper report that the Thai government wants to “encourage” a move towards a cashless society, while at the same time it is introducing a tax on electronic payments.

@connecteconomy also says in her post that her bank account was frozen a few months ago by the tax office, due to a mistake they made. This almost happened to me a few years ago. I paid my tax bill, but for some bizarre reason, my payment was put in a separate “credit” account, and I received demands for late payment.

If your bank account is frozen, as @connecteconomy points out, you wouldn’t even be able to borrow money digitally, and in a cashless society, this would leave you stumped. How would you get the money for your immediate basic needs? Would you be forced to work for very low wages or in dangerous conditions? Unlimited power over the money supply could potentially be abused.

Some people fear that cryptocurrency could be used to usher in a world currency. But with decentralized blockchains, this should not be an issue. The more decentralized blockchains and currencies there are, the more difficult it is to control them. It’s up to us – all of us – to build them and use them.

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