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Cashless society Vs terrorism: Are States fighting last year’s war again?


The deletion of cash will do little or nothing to tackle terrorist cells, which have an arsenal of fall-back solutions, such as ghost accounts, offshore accounts, hawala networks, foreign currencies, etc. A cashless society will simply impose on itself the totalitarianism which terrorists would otherwise bring.




In the growing arsenal of State strategies to fight terrorism, fostering cashless societies has been hailed as a method to deprive terrorists of the most private payment system. With electronic money as the sole transaction medium, States hope to use the paper trail to track terrorist cells. But research shows eradicating cash would do little to hamper terrorism and would even help them in their goals.
 
Starting in the 21st century, terrorist modi operandi have considerably decreased their profile, in the attempt to escape the growing arsenal of technical and technological assets which governments can use to track and monitor communications and transactions. As a matter of example, operations on September 11 involved large cash transfers, and regular updates between operating cells in preparation, and command centers in Afghanistan and the middle-East. As a natural consequence, State authorities and anti-cash activists were quick to associate cash with terrorist activities, and to imply that, by suppressing cash, one would stymie terrorist operations.
 
Regardless of the improvements made on detection methods, tools, and allied cooperation, cash transactions evade, and will continue to do so, detection systems. This leads State authorities on a wild goose chase, attempting to control uncontrollable cash, while terrorist organizations have long moved on to new technological solutions.
 
Various organizations, such as the European Union have therefore started squeezing down on cash, limiting cross-border movements . However, geostrategy expert Marco Lombardi says: “Sporadic evidence of terrorists’ use of digital currency has been found since 2012 and in the last months, with the increasing efforts of Daesh aimed to establish the “Virtual caliphate”, this trend has been growing [...] Cryptocurrencies, bitcoin as first, made anonymous transactions faster and more secure, overlapping the need of basing the whole operation on people’s trust.
 
Cryptocurrencies have proven valuable help to terrorist organizations, which previously relied on Hawala networks to run their finances. Transferring funds to Western countries covertly, is therefore a service provided by cryptocurrencies, far better than by Hawala-cash networks.
 
Dennis Lormel, managing director for investigative firm IPSA, confirms that terrorist cells have been using technological networks for several years, leaving cash behind, as reported by financial reporter Jeremy Simon. “Terrorists are increasingly turning to credit cards, according to an expert on terrorist financing. Credit cards serve two key terrorist functions, providing both operational funding and as a means of distributing money to group members. "Credit card exploitation and fraud has become a growth industry for terrorists," writes IPSA International's Dennis Lormel in a September 2008 white paper entitled "Terrorism and Credit Card Information Theft” [...] "I think it's taken an upward path over the last few years," he adds, meaning "a limited number of people can do an incredible amount of damage." Fintech apps, which enabled encrypted payments to be made online, have had to address the risk of terrorist operations within their service.
 
Setting up online (and therefore electronic) accounts, such as Paypal and off-shore or crypto-currency accounts is well within terrorist capabilities, despite most large companies cooperating with authorities and reporting suspicious activities. The Daily Hodl, specialized in the digital economy, reports that “As blockchain technology provides certain anonymity for traders, miners and the like, criminals too have discovered blockchain-based currencies as a means for money laundering, tax evasion and the funding of terrorism. At the same time, regulatory institutions, with the European parliament up front, are setting up restrictions when it comes to the intersection of virtual currencies with the existing financial setting.”
 
The vast sums now involved in terrorism financing simply make cash an outdated medium. Political analyst David Adesnik assesses the sums, for the Syrian conflict alone, to be in the billions: “Iran does not disclose how much it spends supporting foreign “resistance” organizations and clients such as Bashar al-Assad, yet open-source reports suggest those efforts cost more than $16 billion per year”, very little of which is in cash, as reported by criminologist Bill Tupman: “Quite often, terrorists transfer money in plain sight: If it isn’t done through the ordinary banking system, it’s done through shell companies".
 
The suppression of cash is an understandable mirage for governmental agencies, which traditionally dislike and distrust areas of the economy which they cannot control. But the deletion of cash will do little or nothing to tackle terrorist cells, which have an arsenal of fall-back solutions, such as ghost accounts, offshore accounts, hawala networks, foreign currencies, etc.
 
It will, however, serve terrorist purposes, in their asymmetric warfare strategy, insofar as it will lead their enemies to reduce their own liberty and financial options. Serious scrutiny of the current lay of the land shows that focus should be placed on the increase of online detection methods - the terrorist area of predilection - rather than on suppressing cash. A cashless society will simply impose on itself the totalitarianism which terrorists would otherwise bring.










The cashless society from an ethical point of view

The debate about the move towards a cashless society has been at the center of the scene for several years, now. Various angles have been taken by economists, politicians, banking institutions and sociologists. Beyond the technicalities of the debate, lies the question of freedom, of inter-citizen solidarity and of governmental responsibility. The debate cannot remain in the hands of financial specialists, it is first and foremost an ethical, political and societal issue.

The cashless society from an ethical point of view









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