In an interview cleverly titled, 'No Currency for Old Men,' an International Currency Association (ICA) spokesperson explains how the war on cash betrays public opinion.
If the CEO of Mastercard is correct in declaring that 'data is the new oil' in this digital era, then cash can be expected to continue thriving. Why? Because it is able to protect people's right to privacy and freedom of movement in a way that no other payment option can. Don't let cashless campaigners fool you into giving them up!
"The forces against cash are easy to find: governments, central banks, e-commerce investors, among others. The guys on the other side [the cash lobby championing the cause for cash] are not so high-profile." - ICA spokesperson
Excerpt from Currency News interview article by Sean Murphy
Q: What are the main forces working against currency and what do you think motivates those forces?
ICA: Let me quote Yves Mersch once again, "Advocates of a cashless society tend to fall into three distinct camps: the alchemists, the law and order camp, the fintech alliance."
The 'alchemists' believe that the elimination of cash would enable central banks to introduce negative interest rates without risking a bank run. If money stored on bank account brings a negative return or, in other words, is charged a fee, individuals and businesses will, at some point, start hoarding cash instead. This would nullify the policy goal of making them spend the money. Thus, monetary policy cannot go much below the 'zero bound' of interest rates. The advantage of a cashless society, the argument goes, would be to have no zero bound, thus liberating the full power of monetary policy... Continue reading.
"Cash is doing very well, thank you! Outside the Scandinavian countries and some African countries, cash is still in pole position. Even China; with all its digital innovations is still a heavy cash user. In India, cash is back with a renewed vengeance."
The 'law and order' camp claims that anonymity of cash purportedly makes it attractive for illegal activity. Yes, banknotes are used by tax evaders and criminals, just as they are used by billions of people all over the world for perfectly legitimate transactions. The reduction of cash in circulation, or even its elimination, would have no impact on crime and tax evasion. As we have seen recently with the Panama papers, Paradise papers, LuxLeaks, Laundromat, etc, there are numerous ways of laundering money and evading taxes which do not involve cash.
Lastly, the 'fintechs' believe they can develop alternatives to cash. But so far, they...
Murphy, Sean. December 6, 2017. "No Currency for Old Men". International Currency Association. Electronically published December 14, 2017. Accessed December 18, 2017.
Sean Murphy is a writer for the Lafferty Group.
The International Currency Association is a not-for-profit organisation that is working to: Support and promote currencies worldwide as universal and inclusive means of payment, defend and promote the use of cash as a key option for payments, anticipate and prepare the functionalities of the cash of tomorrow, and... Continue reading.