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Governments and sovereignty concerns in a cashless society


Central banks are putting up remarkably little resistance in defending the currencies they issue, in the global war on cash. As cash prevalence slowly dwindles, private banks and payment solutions are getting closer to their goals, and central banks take a second-row seat to the show. But the demise of cash would relinquish them to the status of secondary players on the market and do disservice to the peoples they administer.




The multiplication of online payment solutions, combined with the growing development of the world, makes the trend inevitable. Guardian Kate Lyons describes the British segment of it: “In 2006, 62% of all payments in the UK were made using cash; in 2016 the proportion had fallen to 40%. By 2026, it is predicted cash will be used for just 21%, according to figures from UK Finance. ATM data show that in 2016, there were 2.7bn withdrawals from the country’s 70,000 cash machines – the lowest number of transactions since 2010.” As dematerialized payments become more common, payment solution providers increase their profits and secure their market positions, with no ill will towards national sovereignty. These companies only wish to replace banknotes as a means of payment, but the national and economic symbol will disappear as well, if banknotes are suppressed.
 
Banks and payment solution providers are among the largest cashless society promoters, for obvious economic reasons. Their push against currency is not aimed against national sovereignty, quite the opposite. In fact, as part of the economic establishment, they tend to side with public powers, not against them, which protect and stabilize the market with regulations. CCN Carter Graydon further describes the fundamental mission of States and their central banks: “Governments exercise a monopoly power on currency creation with the understanding that doing so will provide its citizens with a greater level of economic stability.” In this quest, governments and banks should work hand in hand to protect sovereignty.
 
Banknotes are a transaction medium but also a symbol of the powers that be, and of a people’s ability to build an economy, and spend freely what they have earned. A function adequately provided by banknotes, which would no longer be served in a cashless economy, damaging the public’s confidence in its currency. Irish Times Conan McCrohan writes : “Cash has a major advantage over debit cards in that it is completely anonymous and untraceable. Any electronic payment leaves a log on the servers belonging to the companies who manage the transaction, which is a major problem for those of us who care about privacy. Furthermore, these same companies have absolute power to decide where we can and cannot spend what is supposedly our own money.
 
Private interests want to kill cash because they don’t control it. Any remaining share of cash transactions is that much loss in profit, and as big a blind spot on the market - thus is the inherently private nature of cash transactions. Excessive control of payment means can be linked to the increase in crypto-currencies and safe haven escapes, which further deplete central bank authority and control.
 
A cashless society would further deteriorate the public confidence in its economic partners, which is precisely what central banks are meant to fight. Global Treasurer Nathan Evans writes : “Central banks are responsible for national and regional currencies, a crucial role they have always taken on, ever since currencies have existed. Throughout history, not only were they in charge of maintaining economic stability, but also the global reputation of their coins and banknotes. This was done through their ability to fight off counterfeiters, and the care brought to the economy behind the currency. But also, and this is no secondary task, they were in charge of the symbol embedded within the cash.”
 
Despite the market’s convenience-based drift away from cash, there is still public attachment to cash, and the growing concern about privacy will only entrench it. GAFA companies are already seen as a major threat to sovereignty, given their financial power, their ability to gather information about individuals, and their foreign-based influence. Killing cash amounts to the abdication of all forms of economic sovereignty.










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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