By Richard Giedroyc
Sweden and Denmark may each be on its way to becoming a cashless society, but people in other countries may see the rise of a cashless society in lesser terms.
Bank of England Governor Mark Carney was blunt about the concept when he recently described a society in which cash has been abolished to the Treasury Select Committee as being a “thought experiment.”
Carney said, “Cash use continues to grow in this economy. The potential role for digital money alongside cash is something we are researching and thinking through.”
Carney’s remarks came as a response to the suggestion of abolishing cash in Great Britain made in September by Bank of England Chief Economist Andy Haldane. Haldane called the concept of abolishing physical cash as a “precautionary principle” that forms part of a “useful think-through about what insurance mechanisms [the Bank of England] might have at our disposal” when interest rates are near zero.
According to statistics sited by Haldane, 80 percent of all Bank of England money “is digital and pays interest.”
Haldane tried to re-explain his comments, saying: “I was certainly not proposing the abolition of cash, I wasn’t arguing for the invalidation of bank notes.”
Recently released statistics indicate the use of physical cash used for making monetary transactions fell in Great Britain to between 21 and 27 percent during 2014 as compared to 34 to 45 percent in 2000. During 2014 debit cards were used for expenditures totaling about £ 362 billion as compared to £166 billion using coins and bank notes.
The case for continuing the use of coins and bank notes may be getting a sympathetic ear from the governor of the Bank of England, but not from the prestigious Financial Times newspaper. In the Nov.28 issue the newspaper said, “Coins seem quaint, and paper money is not far behind. Half Britain’s ... growth in developing economies does push up demand for bank notes.”
Discussions involving the potential for a cashless society are being discussed elsewhere as well. Ovation International magazine publisher Dele Momodu recently wrote a letter to Nigerian President Muhammadu Buhair in which Momodu called debit cards a fiasco. According to Momodu, the Central Bank of Nigeria is pushing for a cashless society that “jeopardizes your fight against corruption because government officials who travel abroad must of necessity carry large sums of cash if they are not to be embarrassed or even disgraced.”
Casey Research is an advocate for “personal freedom through financial freedom.” According to a Nov. 27 online posting, Italy has made cash transactions of more than 1,000 euro illegal, Spain has banned cash transactions in excess of 2,500 euro, and France in excess of 1,000 euro. Switzerland has proposed banning cash transactions of more than 100,000 francs, Russia has banned cash transactions in excess of $10,000, Mexico above 200,000 pesos, and Uruguay more than $5,000.
According to Casey Research, “The War on Cash is a favorite pet project of the economic central planners. They want to eliminate hand-to-hand currency so that governments can document, control, and tax everything.”
The Dec. 1 Irish Independent newspaper quotes CoffeeAngel owner Karl Purdy as saying of going cashless, “People like the convenience - and anything that makes the customer experience better is good for us. There are benefits for us too, in terms of efficiency, and banks like it because we’re not coming into them with bags of 1 and 2 euro coins.”
Coffeeangel introduced what it calls contactless payments two years ago. According to Purdy, “…as contactless becomes commonplace, people get used to paying for things this way. Once Apple Pay comes on stream in this part of the world, they’ll be using their smart phones more often too.”
The Irish city of Cork has experimented with “Cork Cashes Out,” offering prizes to people who use credit or debit cards while the city moves to become the first cash-free city in the country.
On the opposite end of the spectrum, social justice and policy head of the Irish charitable organization Society of St. Vincent de Paul John-Mark McCafferty recently said, “More than 10 percent of Irish adults do not have a bank account and subsequently don’t have a credit or debit card. It’s important that such people are not excluded from any future developments and should be able to use cash and not be penalized for doing so.”
According to the Nov.19 IBS Intelligence online posting, a recent survey done by the IBS Journal indicated 53 percent of respondents were against a cashless society, while 40 percent were in favor of it.
Recent surveys note the majority of people who are against the idea of a cashless society are concerned with what the IBS Journal calls “the Orwellian nightmare of total control.”
An unnamed American told the journal, “I don’t want every purchase identifiable back to me,” while someone surveyed from the Netherlands said, “The main problem is the totalitarian control that could be exercised over the population.”
This article was originally printed in World Coin News.
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