The cashless megatrend or at least the trend toward a cash-lite economy is a societal transformation that will have a profound impact. That trend is persisting, if not unstoppable. Banks are touting the positive benefits to society and governments as well as to individuals. “Have we reached peak cash?” says James Pomeroy, a HSBC Global Economist.
“A world without cash: The impact of the rise in electronic payments,” is an HSBC report in which Pomeroy sees a world in which the use of cash is “in severe decline” and highlights the rates that cashless or less-cash is being adopted around the world.
Most of the benefits are centered on convenience, cost efficiency, better monetary control and security. For individuals, the cashless society “is only a good thing,” Pomeroy said in a video interview. Needless to say Pomeroy doesn’t understand the prophetic implications of a cashless world.
For businesses, the ability to reduce the cost associated with managing cash, particularly retail operations, is a significant benefit. For governments, digital cash offers the ability to more efficiently track down tax evaders and combat crime. Banks that don’t hold cash don’t get robbed, and generally, people who don’t carry cash aren’t likely to get robbed either. But for central banks and bankers in general the financial benefits are enormous.
Pomeroy says that a cashless society puts another important weapon in the central banker’s toolbox (against the individual); negative interest. “…At some point in the future, central banks will need to cut rates again and negative policy rates will likely be back on the agenda.”
In other words, the central banks haven’t solved the problems associated with their own monetary policies. Eventually, another down cycle will put pressure on the central banks to charge negative interest to the consumer banks, which will pass on that negative interest to their customers.
But negative interest rates are merely an economic concern for individuals and businesses. There are spiritual concerns for individuals and businesses when the banks can exclude anyone from buying and selling, which a digital economy affords.
Euromoney journalist Solomon Teague says, “With little room for further cuts, and many economies still too sickly to be subjected to significant rises, [central banks] have been left with a dwindling choice of tools with which to steer economies.” Teague also pointed out that “even the most powerful central banks have found their influence on markets is waning as interest rates have trended towards zero or negative.” But in a cashless environment central bankers will have a new level of influence over the economy.
An issue on the negative side, Teague said is a topic little mentioned by the bankers and governments: “unprecedented control.” He said, “This control could be used in a number of ways.” For instance, to prevent capital flight when a currency devalues too quickly, banks would be better equipped to manage that problem. “But governments, through their central banks, could also manipulate digital money to pursue specific social or economic policy objectives,” he said, “such as discouraging certain behaviors.”
What would those objectives be? And what would be the target behaviors to discourage? Teague answers, “In a more dystopian vision of the future, [Central Bank issued Digital Currencies] have significant implications for individual liberty [and] could throw up political challenges.”
The Bible portrays a future in which those who refuse to cooperate with prescribed forms of worship would be forcefully disengaged from the economy making it difficult for them to survive without supernatural help.
Pomeroy also pointed out that there are also a number of possible downsides to cashlessness from a social perspective. “There are obviously concerns about snooping from governments, which would know everything about transactions in an economy. For many this isn’t a problem, there remains a large section of the population who remain concerned about statism in this world.”
It is interesting that these economists are dancing around the real issue without naming it. They are working for a global government and they realize that liberty would also be vulnerable in a cashless world.
“However we end up there, it appears much of the world is well on the path towards a cashless (or at least cash-lite) society,” Pomeroy added.
Some countries are moving away from cash payments quite quickly. Sweden is the blueprint. But similar trends are seen in smaller economies such as Denmark, where ATMs are in sharp decline, in Norway where the aim is to be cashless by 2030, in Finland where prepaid cards are helping to integrate refugees, and in Estonia where plans to move cashless have been in place since 2010. The Netherlands already has many stores that won’t take cash. The cashless society is coming, say those who are entrusted to manage cash. It’s just a matter of when.
“And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.”
Keep the Faith will continue to watch this megatrend and keep you informed.
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