The advent of a cashless society is closer than we think. Recently, Visa issued a press release stating they would pay restaurants and small businesses to stop accepting cash.
We also see a rise in the cryptocurrency market with everyone scrambling to get in. Japan and India have even legalized Bitcoins as a form of currency and US financial regulators have their sights set on Bitcoin.
The average person today, in a developed society at least, probably carries one or more credit or debit cards and uses them quite frequently. The cashless society meme is being pushed hard by media outlets all over the world, in addition to the two already mentioned: Norway, Sweden, China, and Canada.
Convenience is the driving factor behind this. Credit cards and internet banking sure make life easy with auto-pay and electronic statements. Organizing finances is a lot less burdensome than it used to be with everything recorded electronically.
Ease of use is demonstrably more important to people than the particulars of a strong currency backed by something of solid value, such as gold. People today don’t really seem to care about the funny-money, debt based, fractional reserve banking system we have in place today – as long as it keeps working.
When cryptos like Bitcoin become regulated in financial markets, people will probably be okay switching over to them entirely. We sure don’t mind using the monopoly money the Fed prints. The infrastructure for such technology is already there with services such as Paypal, ApplePay, Venmo, even Google Wallet, programs that allow users to transmit funds to others electronically.
The application of more digital technologies in currencies will ultimately lead to a completely digital medium of exchange.
Instead of having to carry a wallet with cash and plastic, those will easily be replaced by chips, possibly installed into humans, for “convenience.”
Some also argue that because cash and coin cost money to print, and in some cases more than what they are worth like the penny and nickel, having some digital medium instead would reduce those costs.
“If we move to a truly cashless society, it won’t be much of an adjustment for most Americans,” Greg McBride, Bankrate’s Chief Financial Analyst, said.
A completely digital financial system would allow the government to control and monitor everything.
“Traceable transactions could help inhibit terrorist financing, money laundering, fraud, tax evasion and corruption,” (Source).
The media will push this as hard as they can, like they have been, with all the reasons listed above, to sway people of all persuasions that they should adopt a digital currency.
Jumping into a completely digital currency is a little too much. There are plenty of other ways to fight terrorist financing than ban cash, unless you think millions of actual, physical dollars are shipped all over the world to terrorist organizations, when in fact this amount of money is routed into a bank account, not cash.
Perhaps if the government wanted to collect more tax revenue, they would move to a more efficient model of taxation such as the transaction tax. As much as it might inconvenience them, cutting back on frivolous expenditures and waste will go a long way as well, although it will probably be too much to ask of the political elite.
These arguments will be repeated again and again until people are parroting them back at others who don’t wish to hand over their freedom and privacy.