Last month, the British Retail Consortium (BRC) released a report showing that shoppers spent more on their credit cards than with cash last year. While the use of debit cards overtook cash a few years ago, this is the first time that credit has done so. Today cash makes up 20% of all transactions in the UK, with the remaining 80% being plastic — or more accurately, digital. And worryingly, the current rate means that cash could well and truly be dead in another 10 years.
Some argue that removing cash will reduce crime and help us build better solutions with the technology available to use today (it’s hard to argue that tapping your card is much easier than fumbling in your pocket for coins). To others, cash is essential for some of the more vulnerable in society: the poor, the disabled, or those who just need the physicality of cash to help with budgeting. But both these arguments miss something pretty important. In a cashless society, our financial life is no longer private.
Why Killing Cash Can Be Attractive
But why do countries ‘go cashless’ in the first place. Take Sweden, for example. It’s a widely used example of a modern cashless society. It’s often seen as a progressive country that stands as a beacon of a new societal relationship with money. But how did it get to that point? Technology does not act in isolation. For real societal change, you must also examine how social conditions that foster alongside, or even more accurately, intertwined in the technology.
Sweden is no different. While the adoption of digital technologies, of course, played a large role, something more unique triggered the acceptance of this move away from cash. An increase in robberies across banks and shops during the mid-2000’s influenced the view on how cash was perceived. Between 2004 and 2005, robberies rose from 8,590 to 9,298 — an increase of over 9% in just one year. But it wasn’t until 2009 when the infamous Västberga helicopter robbery occurred that a new emotional relationship with cash was forged, edging Sweden on its way to a new era.
Meanwhile in the East, China adopted the concept of a cashless environment as a form of social control. The well-reported social credit system is intrinsically linked to individuals’ wealth and spending habits. How better to control a nation than to ensure all their payments are made digitally? The people who sold the benefits of mobile wallets said it would reduce counterfeit notes, increase security and of course help bolster their social credit scores. Unlike some of the European countries, China leads the way in the mobile wallets and peer-to-peer payments and has initiatives in place to seize Sweden’s crown in becoming the world’s first cashless society.
Why Cashless is Isn’t The Answer
The social relationship with money is incredibly complex that we can’t do justice here. The reasons that explain why countries go cashless are many — and not always as simple as promised. But let’s take a look at a few.
When it comes to increased security, the argument is somewhat flawed. Stories of hacking and unlawfully accessing individuals’ data and information are rife. Not a single day goes past without some attack, or attempt, taking place around the world.
The other pertinent issue is control or lack thereof. Without cash, our money is bound by gatekeepers, and underhandedly nefarious gatekeepers at that. A sweeping statement, but Banks are untrustworthy. A survey in 2018 showed 66% of the UK population don’t trust banks. The moment you entrust your hard-earned savings to a third party, you assume an additional risk to the future of your family which you need to manage with costly insurance and trust that further regulations will protect you. It’s a fear that becomes all the more terrifying if you’re stuck in a politically unstable or corrupt country.
The presence of an intermediary means every transaction is recorded, and nothing can be done without that overseeing eye. Our privacy is at once eroded and destroyed as the arms race begins for the biggest collection of economic data. Whilst you can track where your money is going, so can others — and they often have different priorities that aren’t aligned with your own.
Are Cryptocurrencies the Solution?
Cash has unique properties. It’s physical, you can touch it. Cash can be spent anonymously. We’re untraceable. And while yes, it can be stolen or lost, it can’t be assumed that these issues disappear in digital markets. But if the answer isn’t reverting back to cash-only societies, so could this new breed of cryptocurrencies solve these problems?
In a blunt answer, no. While cryptocurrencies can solve answer many problems in our economic system, not all currencies are created equal. Blockchain-based currencies are usually on a public ledger. Great when transparency is essential (tracking government spending for example), but nightmarish for your own personal expenses. Anonymity, in general, tends to lack from many crypto payments. Take Bitcoin. All transactions are stored publicly and permanently on the Network, which means anyone can see the balance and transaction history of any Bitcoin address.
But there is light at the end of the tunnel. There are some crypto projects out there that have privacy baked-in, not just as a consideration but essential to their product. Zcash and Monero are oft-referenced examples but our very own Safecoin has all the properties than enable a truly private coin.
So while the future might be storming towards a cashless society, we’re ok with that. We have a solution with privacy baked-in. And as our coin isn’t built on a blockchain, there’s no public ledger. Only the current and previous owner of each coin are known to each other. So you can be paid in private.