WEF says COVID moved us toward a cashless economy - but do we have to go along with it? - Part 2

Caryn Lipson

May 5, 2024

The World Economic Forum (WEF) says COVID moved us toward a cashless economy. Frontline News reported how that claim was celebrated at the WEF conference in Riyadh, Saudi Arabia. The connection between COVID-19 and the ability to move along its cashless agenda was discussed at the conference's opening plenary. Khalid Humaidan, Bahrain's chief central banker who spoke during the session, noted that people's acceptance at the time showed their trust in the government's policy about cash:

I think the transition to fully digital is not going to be a stretch, people are used to it, people are engaged in it, and circumstances that help is adoption rates increased because of Covid.

This is where contactless [payment systems] started to become something of a necessity, something of a safety, something of a requirement, and because of that there is very little resistance, trust is already there ...

Frontline News concluded the first of this two-part series by asking if we have a choice in the matter or if a cashless society is inevitable, noting that cash is still needed and often the preferred choice of payment for many. We explore the future of paper currency in this part.

Cash still needed

Cash is essential to most economies

According to Cash Matters, “cash continues to play an essential role in most economies,” accounting for over $7.6 trillion in consumer spending throughout 2022.

Cash remains the most-used payment option across Africa and the Middle East, and Latin America, with the rate of decline in its use seen globally during the pandemic levelling off. Around the world, while its use has dropped in many countries, it remains steady in some and has seen modest rises in others. In Italy, the share of cash transactions at point of sale (POS) remained steady in 2021 and 2022 at 27 percent, while it rose in America from 11 to 12 percent, and in France from nine to 10 percent.

Important in the UK

Cash is very important for the UK economy for several reasons, writes FT Adviser.

⇢ Cash use helps maintain neighborhoods.

The presence of banks, financial institutions, and stores helps maintain upscale neighborhoods. Yet, with cash transactions declining, many stores and institutions closed and their communities have devolved into slums with fast-food restaurants. “The aroma of stinky burgers pervades once fine streets all over Britain. Is this the best a nation of shopkeepers can do for our health and wellbeing?,” FT Adviser asks.

⇢ Cash is valued by the elderly and people who have low incomes.

According to the Bank of England, which is currently running an exhibition called “The future of Money” until September 2025: “Cash remains a valued form of money for the elderly and those on lower incomes, with many using it to budget and manage their household finances.”

⇢ Cash is needed by people with disabilities who cannot manage technology.

Some people with physical and cognitive disabilities also find other payment methods difficult to use (they may struggle with pin numbers or passwords, for example).

⇢ Going cashless might trigger an economic disaster.

FT Adviser described five instances where the electricity and/or internet were disrupted and stores could not accept payment, resulting in lost profits, or could only accept cash. In one case, the store could accept credit cards but could only provide a handwritten receipt.

Japan prefers cash

Japanese prefer cash as it is secure and reliable and a means of being aware of how much money one has, decreasing the risk of overspending, according to Cash Matters:

Assessing the reasons why Japanese consumers prefer cash, Statista notes its security and reliability are highly valued. Over 55 percent of respondents cited concerns over personal information leakage as being a major drawback of cashless options. Nearly 42 percent worried about credit cards and account details being stolen—which could allow thieves to run up huge bills in their name—and around 38 percent said cashless options made them less aware of the amount of money they are spending, increasing the risk of spending too much.

Cash Matters included this graph from Statista showing concerns about going cashless in Japan:

Cash is also treated with respect in Japan; people with bifold wallets can keep track of their money and avoid overspending, a practice of the wealthy.

Japan Today noted bifold wallets allow more space for cash and help keep banknotes neat and uncreased. It cited a book by accountant Junichiro Kameda—Why Wealthy People Use Long Wallets—as one source of information on the importance of careful handling of cash, which the author believes ‘will help people appreciate their money and control their spending’.

The U.S. needs cash, too

Money Under 30 contemplated the future of cash in the United States since many younger people are not using it, and with more and more transactions being done electronically. While this can hamper drug-related crimes and theft of cash, Money under 30 noted it will also mean the layoff of many people who handle cash transactions.

People still rely on cash

The benefits of cash are significant enough that the future of a cashless U.S. is in doubt. Nine million U.S. households do not have a relationship with a bank and a further 24.5 million households obtain financial services and products outside the banking system.

A survey by the FDIC in 2015 revealed that 7% of US households, or about nine million households, had no banking relationship; these households are referred to as “unbanked”. The same survey reported an additional 19.9%—or 24.5 million households—are classified as “underbanked”. That means the household had a checking or savings account, but obtained financial products and services outside the banking system.

The problem for many of the poor is bank fees. This can be compounded by low or unsteady income and deposits, resulting in non-sufficient funds (NSF) fees and even account closures by banks.

Money Under 30 also referenced a Pew Research Center study that found that more than 11% of Americans do not use the Internet.

But apart from banks, a study by the Pew Research Center found 11% of Americans don’t use the Internet. The percentage is even higher among the elderly and those who live in rural areas. Eliminating cash could potentially exclude this segment of the population from participating fully in the economy.

Back to barter?

Using paper currency eliminates or reduces the possibility of identity theft and provides privacy. If the U.S. would, ultimately, go cashless, barter may make a comeback.

A full-on cashless society may cause a return to barter. This may start among the poor, and among those who are simply uncomfortable going completely cashless. It’s something governments are undoubtedly weighing out very carefully, and why cash hasn’t been declared illegal thus far.

U.S. bill would preserve cash

The Payment Choice Act, a bill to preserve the use of cash, was reintroduced in Congress in June 2023 by Rep. Donald M. Payne, Jr., Loomis, the U.S.'s largest integrated cash distribution network, reported.

The bill aims to address the growing trend of businesses favoring digital payment methods over cash, ensuring that Americans retain the freedom to use physical currency for transactions. This legislation would also prohibit retail businesses from charging a higher price for using cash than for other forms of payment.

Less cash does not mean less crime

Interestingly, Cash Matters cites studies showing that restricting the use of cash does not mitigate money laundering or reduce support for terrorism. Rather, it restricts financial autonomy and personal rights and makes it harder to fight crime “since [cash's] movement is often the only surface point of otherwise hidden, illicit acts.”

Teaching kids about money — without money?

Teaching children about the value of money may become more difficult as cash is used less and less. The following articles offer some perspectives on the topic:

Countries and cash

The charts below, produced by Merchant Machine's analysis, display the degree of reliance on cash by different countries as of August 2022, as reported by Payments, cards and mobile.

Read about the experiences of Sweden and Zimbabwe with going cashless. The Conversation explained that it wasn't straightforward. Sweden has had to backtrack and in Zimbabwe, where trust in government is low, “Bad cash is better than good plastic!” as one street vendor said.

Are we becoming boiled frogs? Is there any hope?

PJ Media, in its report on the WEF conference in Riyadh, concluded with a warning not to allow ourselves to be lulled into complacency when it comes to electronic transactions and digital currency. PJ Media argued that accepting what was voluntary — the widespread use of electronic payments during COVID as a safety measure — to become the only option allowed and a tool of social control is like boiling a frog in water. The frog, for those who don't know the analogy, is first put into a pot of cold water. The fire under the pot is slowly raised so that by the time the frog is troubled by the heat, it can no longer jump out.

This is the frog boiling in water analogy: it starts with a voluntary program marketed to the public as a tool of convenience and efficiency, only to slowly replace any alternatives by fiat and become a transparent tool of social control, even though that’s how it was intended by the governing authorities all along. The technocrats’ bet is that at such a point that the abuse of this new technology becomes fully transparent and indisputable, any means of resistance will be nullified and it won’t matter.

Since the WEF and others are still working to promote acceptance of the exclusive use of Central Bank Digital Currency (CBDC), there is still time to resist going cashless. PJ Media writes, parenthetically, that once resistance is impossible they no longer need to use propaganda. So long as they attempt to persuade us, there is still an opportunity to stop them.

This is why it’s always optimistic to remember the adage that “if resistance were impossible, the propaganda wouldn’t be necessary.” It’s only after the propaganda, whether regarding CBDC or any other social engineering cause, ceases to be useful to the state and it abandons any attempt at persuasion that we have entered the stage of totalitarianism.

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