Why a cashless economy is simply the privatization of digital payments

Why a cashless economy is simply the privatization of digital payments
The share of digital payments is steadily growing. Capgemini and BNP Paribas expect people around the world to make 726 billion transactions using digital payment technologies by 2020. "Non-cash payments have increased in volume due to the rise in adoption of digital payment services across all market segments," Christophe Vergne, cards and payment practice leader at Capgemini, told CNBC.

Banknotes and coins are gradually flowing from wallets to bank accounts. At first glance, this seems to be an organic continuation of the digitalization of society. There’s no modern social service, be it medicine or education, that would do without new technologies. However, despite all the innovations, nobody even thinks about devolving regulation of these structures completely to private hands. The finance is no less important, but why do we so readily agree to private regulation of our funds?

Private companies are overtaking governments

Cash is issued and regulated by central banks, such as the Federal Reserve System in the US, the European Central Bank in the EU, People’s Bank of China and others. It is their sovereign prerogative to regulate quantity of money, set the reserve requirement and interest rates, as well as to introduce other measures to keep the economy stable. Their actions directly affect our quality of life in the form of availability of loans, inflation rate, deposits on our accounts and other essential aspects.

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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.

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The debate

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New York City Cashless Stores must comply with the law