It’s a safe prediction to make: Governments will continue their war on cash with the goal of requiring all transactions to be conducted via some form of electronic funds transfer such as a debit card. The reason is simple. They lose a lot of tax dollars each year by the non-reporting of cash transactions. Since the underground economy which runs on cash is by definition hidden, some estimates have placed the losses as high as 10% of tax revenues. Perhaps higher.
The US Government would certainly find abolishing cash desirable just from this perspective. Perhaps one strategy would be to foster a move to banish cash among other nations.
In early November, without warning, the Indian government declared the two largest denomination bills invalid, abolishing over 80 percent of circulating cash by value. Amidst all the commotion and outrage this caused, nobody seems to have taken note of the decisive role that Washington played in this. That is surprising, as Washington’s role has been disguised only very superficially.
An eighty percent reduction in the amount of cash in circulation is huge. But how is Washington involved in this matter in India?
US-President Barack Obama has declared the strategic partnership with India a priority of his foreign policy. China needs to be reined in. In the context of this partnership, the US government’s development agency USAID has negotiated cooperation agreements with the Indian ministry of finance. One of these has the declared goal to push back the use of cash in favor of digital payments in India and globally.
We have a good idea of why cash is seen as an enemy by governments, but what else can be known about this move to ban cash globally?
The business interests of the US-companies that dominate the gobal IT business and payment systems are an important reason for the zeal of the US-government in its push to reduce cash use worldwide, but it is not the only one and might not be the most important one. Another motive is surveillance power that goes with increased use of digital payment. US-intelligence organizations and IT-companies together can survey all international payments done through banks and can monitor most of the general stream of digital data. Financial data tends to be the most important and valuable.
Yes, it goes back to surveillance. Cash works against that because cash is anonymous. Governments dislike financial transactions they cannot monitor. They might say that the reason is cash transactions make it more difficult to measure and produce economic statistics. But the real reasons are power, taxes, and the ability to monitor how businesses and people are using their money.
Source: Norbert Haring
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