It is almost eerie how just as Bitcoin and the world of digital currency are developing steam through mainstream adoption worldwide that economic instruments of cash are increasingly under siege nation after nation.
Bitcoin’s innovative blockchain technology may be bringing the world an unintended consequence of a loss of freedom and privacy as the financial world is getting in position to phase out cash in favor of a new digital economic system.
Haven’t we met the “black economy” somewhere before?
Australia is poised to pick up the baton when it comes to the global cash banning movement. Singing a familiar tune, the country’s highest-denomination banknote, the $100 Australian dollar note is “under review” in a bid to crack down on the “black economy,” the same terms used by Prime Minister Modi in India when announcing a cash ban in India last month. This “black economy” accounts for an estimated 1.5% of the nation’s GDP, which is going untaxed.
“The whole point of this crackdown on the black economy is to make sure we close down any potential tax loopholes,” Revenue and Financial Services Minister Kelly O’Dwyer said on ABC radio on Wednesday. She warned that there are three times as many $100 notes in circulation than $5 notes. “It does beg the question, ‘Why?’”
An “expert panel” will decide its fate in the weeks to come, and the $50 AUD note may also be at risk. This comes after USB bank recommended last month that the $100 note be removed from circulation, citing common refrains including “increased tax revenue, reduced crime, and reduced welfare fraud.” This wouldn’t exactly hurt the bankers either, UBS admitted.
“From the banks’ perspective there would likely be a spike in deposits if all the $100 notes were deposited into banks, household deposits would rise around four per cent,” the UBS report said.
There does seem to be some resistance in Australian government over this, calling out the idea as a way to spend more tax revenue.
“The only people who are distressed by the cash economy are the government and the public servants who want to spend taxes,” said Liberal Democratic Senator David Leyonhjelm. “The incentives for a cash economy would be reduced a lot if taxes were a lot lower,” he told news.com.au. “It’s a reaction to the level of taxes we pay. I think the solution is to lower taxes so the incentives to avoid paying taxes are lower.”
The destruction of cash worldwide seems to have few limits based on geography. India did not use the excuse that cash is not used, as the 500 and 1000 Rs notes were the most used in the nation of their mostly cash-based society. Spain and France have recently banned any withdrawals over 1000 units. Venezuela just announced a ban on 100-bolivar notes last week, as well.
Meanwhile, many nations have announced a future national digital currency should be expected, including China and Ukraine. Australia, Canada, and other nations are also reviewing the creation of their own form of Bitcoin through a national digital currency.
Of course, the primary difference in their national systems would be a closed-loop network, unlike the open-source protocol Bitcoin utilizes.
The massive benefit, especially for countries like China, is the so-called “capital fight” known for the ability to prevent citizens from removing their funds from the system for better investment options outside of the country. This ability to divest oneself from a declining market would be stamped out by capturing all funds, and citizens, within this new national matrix.
This is the issue with banning cash, and why the populace should work against such measures of the central bankers and governments. If all transactions become digital, and all cash is banned, all transactions will require bank approval, take longer to perform over cash and would definitely no longer be private in any way. Every transaction provided to the government for mass surveillance could easily be tracked based on the amount, time, location, etc.
It appears in the years to come, we will all be using digital currency if this trend of the outlawing of cash continues. The question may be will you use their national version of Bitcoin, the original Bitcoin digital currency, or both. Be sure to choose your next digital currency wisely.