There may come the day when the cash will be illegal. The movement towards a cashless society has already started. The digitalization of the world made it practically inevitable. And considering how much the governments tend to get into every aspect of our lives — it may become a reality sooner than we expect.
One of the good examples of how things are going in that direction is India. In late 2016, Prime Minister Narenda Modi overnight banned all the large denomination bank notes. As the reason why it was said that this move aimed to cut down the corruption and get more people to pay taxes.
These two problems are really big in India. Less than 5 percent of Indian citizens pay taxes, making it extremely hard to keep the country going while the government has an empty treasury.
But this regulation didn’t fix these problems. Instead, it led to massive suffering of the poorest. The poor formed huge lines at the banks for days to turn in their money. Street sellers couldn’t sell anything. The rich dodged taxes anyways by moving their money to gold and jewels.
Within a year, India has returned the majority of the banned bills in circulation.
Real Life Example of Digital Cash Adoption
The step made by Indian authorities was too rushed. The transfer to a cashless society is already happening naturally. Take Hong Kong as an example.
They have an Octopus card. A simple card which can be loaded with cash at any grocery store. Touch the card to a terminal and you are done with paying for anything from a metro ride to goods in the store.
It started as an easy way to pay for metro, and over time everyone began accepting it. We can expect to see more of this in the following years.
Dangers of Centralized Digital Currencies
Centralized digital currencies will take over. But there are hidden dangers that this movement brings.
Centralized money is censorable money.
As the Internet made us susceptible to surveillance, digital money may take it a step further. Our phones know where are we going, with whom and what we want to do. Centralized digital currencies will know even more.
With AI and digital currencies in place, the governments will be able to do follow every step we make. The timeline of our lives will be exposed for the government or hackers to check it and do with that info anything they please.
Tax collecting will be executed automatically, taking a portion from each transaction we make. The complete digitalization of the money will give the government unprecedented power, allowing them to simply blacklist the ability to use the money for anyone they find problematic.
So, what would happen if the government could simply shut down the money you have with a click of a button? The fear would take over. And anyone who speaks against the government could be censored within a minute.
But, there is real hope still.
Out of all cryptocurrencies, one type could help to keep the things in check.
In the next part, we will investigate how privacy coins can help us keep our rights to freedom. Stay tuned! Also, feel free to join the discussion in our Telegram group.