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CBDC Central Bank Digital Currency

Australians Abandon Physical Cash, Financial Freedom

Published

6 months ago

9 minute read

From Heartland Daily News

By J.D. Tuccille

Australians abandon physical cash for digital payments that are easy to use, monitor, and block.

The end of cash has been heralded for years—mostly by government officials eager to end the expense of minting coins and printing banknotes while pushing transactions to digital forms that can be tracked and taxed. The transformation has met varying degrees of acceptance or resistance from people around the globe. But Australians appear to be eagerly advancing down the road toward a cash-free world.

Disappearing Banknotes and Coins

“Cash was once a staple in the economy, but it’s fast becoming a relic of the past,” according to an April report on Australia’s financial evolution from SBSNews. “Just a decade ago, more than half of transactions were cash. Now it’s just one in seven, and it’s happened at an alarming rate.”

Various forms of digital payments now account for the lion’s share of transactions, with a growing number of merchants now refusing coins and banknotes, and ATMs disappearing around the country. That means cash is increasingly difficult to find and use even for those who prefer physical money.

The transformation was turbocharged by COVID-19, as people moved away from any sort of contact. But usage of cash was already plunging, according to the Reserve Bank of Australia, from almost 70 percent of transactions in 2007 to less than 30 percent in 2019. “Cash payments accounted for 13 per cent of the number and 8 per cent of the value of all consumer payments in 2022,” the bank finds.

While Australian consumers and central bank bureaucrats embrace the shift, there are serious downsides to an all-digital economy.

“Digital payments have shortfalls, including their reliance on the internet—which can prove problematic in times of crisis,” cautions SBSNews. The report described the plight of people cut off from processing services by wildfires that severed communications; those with cash could still buy necessities.

Digital transactions also require people to have accounts in their names, which is a challenge for young people and immigrants. And budgeting can be easier with paper and coins than with abstract numbers.

Unmentioned in the piece are any concerns about lost independence when all transactions can be monitored and, potentially, blocked. But that’s a major concern elsewhere.

‘Printed Freedom’

“Printed freedom” is how German economist Lars Feld described physical money in 2015 while responding to a push in his country to abolish physical cash. He defended banknotes and coins on the grounds that people “should be entitled to an escape from all-out state control,” as Hardy Graupner of German broadcaster Deutsche Welle put it.

Such concerns came to a head in 2022 when the Canadian government cut off Freedom Convoy protesters’ access to their own bank accounts and blocked digital donations to their cause.

“It’s a Western version of China’s social credit system that does not altogether prohibit political dissent but makes it so costly that it becomes impractical to the ordinary citizen,” commented David Sacks, former COO of PayPal. He had already warned that electronic payment processors were working with governments to deny access to the financial system on ideological grounds.

Canada’s crackdown was dramatic, but it didn’t stand in isolation.

Digital Transactions and Targeted Industries

In 2022, American Banker reported that “a new code identifying credit card sales of guns and ammunition has been approved by the International Standards Organization, creating a potential path for card networks to help law enforcement agencies identify suspicious sales of guns and ammunition.”

Amidst concerns that banks would help government officials track gun owners, and several states banning the gun-specific merchant codes, the financial industry “paused” implementation.

The merchant code controversy was reminiscent of earlier government efforts, under programs including Operation Choke Point, to cut off businesses disliked by politicians from financial services.

“Operation Choke Point was created by the Justice Department to ‘choke out’ companies the Administration considers a ‘high risk’ or otherwise objectionable, despite the fact that they are legal businesses,” summarized a 2014 House Oversight Committee report. “The sheer breadth of industries affected – including firearms and ammunition sales, adult entertainment, check cashing, and payday lending – has generated significant concern with the objectives and scope of Operation Choke Point.”

Notably, physical money offers a workaround for businesses that government officials don’t like. To this day, marijuana is a largely cash industry for businesses legal at the state level but still illegal under federal law—a serious concern for heavily regulated financial institutions. For pot growers and vendors, cash may not always be ideal (it’s a target for thieves), but it offers the freedom to operate.

Use It or Lose It

That was the sort of concern that pushed Germany’s Lars Feld to describe physical money as “printed freedom.” It also inspired Swiss activists last year to urge their countrymen to vote “yes to a free and independent Swiss currency in the form of coins and banknotes.” Swiss officials rejected the initiative as insufficiently specific, but they also promised to incorporate protections for cash into the constitution.

Many Australians appear to feel otherwise, and they’re not alone. With demand plunging for cash, Denmark stopped printing and minting kroner in 2016 (private companies will be commissioned to produce more as needed).

“One of the reasons why it is no longer profitable to produce coins and banknotes in Denmark is that the Danes increasingly pay with either credit card or mobile phone,” BT reported at the time.

There is no denying that digital transactions are easy—sometimes too easy—requiring only a card or app, and not sufficient paper in your wallet. But despite the still largely unrealized promise of Bitcoin and other cyber currencies, most digital transactions leave records and require processing by third parties. Those intermediaries, under political pressure, can turn our own funds into tools of control. The more accustomed we become to digital payments, the more likely physical money and the freedom it offers will slip away.

“If you don’t use it, you’re going to lose it,” Steve Worthington of Swinburne University’s School of Business, Law, and Entrepreneurship told SBS News. “The less and less we’re able to access and use cash, the more likely it is that we will lose access to it the same way we have with paper cheques.”

It’s something to think about the next time you head for the store to make a purchase.

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Bank of Canada admits ‘significant’ number of citizens would resist digital dollar

Published on October 31, 2024

By

From LifeSiteNews

By Anthony Murdoch

A significant number’ of Canadians are suspicious of government overreach and would resist any measures by the government or central bank to create digital forms of official money.

A Bank of Canada study has found that Canadians are very wary of a government-backed digital currency, concluding that “significant number” of citizens would resist the implementation of such a system.

The study, conducted by the Bank of Canada, found that a “significant number” of Canadians are suspicious of government overreach, and would resist any measures by the government or central bank to create digital forms of official money.  

According to results from the BOC’s report titled The Consumer Value Proposition For A Hypothetical Digital Canadian Dollar, “cash remains an important method of payment” for Canadians and “[c]ertain groups may strongly resist a digital dollar if they conflate its launch with the end of cash issuance.” 

The BOC noted that not only would a “significant number” of Canadians “reject” digital money, but that for some “mindset segments, their lack of interest in a hypothetical digital Canadian dollar was heavily influenced by perceptions of government overreach.” 

As reported by LifeSiteNews in September, the BOC has already said that plans to create a digital “dollar,” also known as a central bank digital currency (CBDC), have been shelved. 

The shelving came after the BOC had already forged ahead and filed a trademark for a digital currency, as LifeSiteNews previously reported.  

Officials from Canada’s central bank said that a digital currency, or electronic “loonie,” will no longer be considered after years of investigating bringing one to market.  

However, that does not mean the BOC is still not researching or exploring other options when it comes to digital money. As noted by researchers, despite there being some “interest” in a “hypothetical digital Canadian dollar,” that “interest does not necessarily translate to adoption.” 

“Most participants felt well served by current means of payment,” noted the study, adding, “Individuals who support the issuance of a hypothetical digital Canadian dollar did not imagine themselves using it regularly.” 

“They were skeptical of the need for this new form of money and of its reliability,” read the report, which also noted, “They did not trust that concepts were secure or that their personal information would be kept private.” 

Given the results from the report, the bank concluded that “[b]road early adoption” of a digital dollar “is unlikely given that available payment methods meet the needs of most users.” 

“Financially vulnerable segments often have the most to gain from this payment method but are most resistant to adoption. Important considerations for appeal and adoption potential include universal merchant acceptance, low costs, easy access, simplified online payments, shared payment features, budgeting tools and customizable security and privacy settings,” it noted.  

Digital currencies have been touted as the future by some government officials, but, as LifeSiteNews has reported before, many experts warn that such technology would restrict freedom and could be used as a “control tool” against citizens, similar to China’s pervasive social credit system.  

Most Canadians do not want a digital dollar, as previously reported by LifeSiteNews. A public survey launched by the BOC to gauge Canadians’ taste for a digital dollar revealed that an overwhelming majority of citizens want to “leave cash alone” and not proceed with a digital iteration of the national currency.  

The BOC last August admitted that the creation of a CBDC is not even necessary, as many people rely on cash to pay for things. The bank concluded that the introduction of a digital currency would only be feasible if consumers demanded its release.  

In August, LifeSiteNews also reported that the Conservative Party is looking to gather support for a bill that would outright ban the federal government from ever creating a digital currency and make it so that cash is kept as the preferred means of settling debts.    

Conservative leader Pierre Poilievre promised that if he is elected prime minister, he would stop any  implementation of a “digital currency” or a compulsory “digital ID” system.  

Prominent opponents of CBDCs have been strongly advocating that citizens use cash whenever possible and boycott businesses that do not accept cash payments as a means of slowing down the imposition of CBDCs.  

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WEF panelist suggests COVID response accustomed people to the idea of CBDCs

Published on May 1, 2024

By

Central Bank of Bahrain governor Khalid Humaidan

From LifeSiteNews

By Tim Hinchliffe

When asked how he would convince people that CBDCs would be a trusted medium of exchange, Bahrain’s central bank governor said that COVID made the digital transformation ‘something of a requirement’ that had ‘very little resistance.’

Central bank digital currencies (CBDCs) will hopefully replace physical cash and become fully digital, a central banker tells the World Economic Forum (WEF).

Speaking at the WEF Special Meeting on Global Collaboration, Growth and Energy Development on Sunday, Central Bank of Bahrain governor Khalid Humaidan told the panel “Open Forum: The Digital Currencies’ Opportunity in the Middle East” that one of the goals of CBDC was to replace cash, at least in Bahrain, and to go “one hundred percent digital.”

Humaidan likened physical cash to being an antiquated “analogue” technology and that CBDC was the digital solution that would hopefully replace cash:

“I thank this panel and this opportunity. It forced me to refine my thoughts and opinions where I’m at a place comfortably now that I’m ready to verbalize what I think about CBDC,” said Humaidan.

If we think cash is the analogue and digital currency is the form of digital – CBDC is the digital form of cash – today, clearly we’re in a hybrid situation; we’re using both.

We know in the past when it comes to cash, central bankers were very much in control with all aspects of cash, and now we’re comfortable to the point where the private sector plays a big role in the printing of the cash, in the distribution of the cash, and with the private sector we use interest rates to manage the supply of cash.

The same thing is likely to happen with CBDC. Yes, the central bank will have a role, but at some point in time – the same way we don’t call it ‘central bank cash’ – we’re probably going to stop calling it central bank digital currency.

“It’s going to be a digital form of the cash, and at some point in time hopefully we will be able to be one hundred percent digital,” he added.

When asked how he would convince people that CBDC would be a trusted medium of exchange, Bahrain’s central bank governor said that people were already used to it and that COVID made the digital transformation “necessary” and “something of a requirement” that had “very little resistance.”

“Right now, many of our payments are digital. The truth is, I said that we’re in a hybrid model; there’s less and less use of cash,” said Humaidan.

I think from predominantly digital with a little physical, I think the transition to fully digital is not going to be a stretch.

People are used to it, people have engaged in it and certain circumstances did help. Its adoption rates increased because of COVID.

“This is where contactless started to become something of a necessity, something of safety, something of a requirement, and because of that there is very little resistance; trust is already there,” he added.

Meanwhile, European Central Bank president Christine Lagarde has been going around the world telling people that the digital euro CBDC would not eliminate cash, and that cash would always be an option.

Speaking at the Bank for International Settlements (BIS) Innovation Summit in March 2023, Lagarde said that a digital currency will never be as anonymous as cash, and for that reason, cash will always be around.

“Is it [digital euro] going to be as private as cash? No,” she said.

A digital currency will never be as anonymous and as protecting of privacy in many respects as cash, which is why cash will always be around.

If people want to use cash in some countries or in some transactions, cash should be available.

“A digital currency is an alternative, is another means of payment and will not provide exactly the same level of privacy and anonymity as cash, but will be pretty close in terms of complete neutrality in relation to the data,” she added.

A WEF Agenda blog post from September, 2017, lists the “gradual obsolescence of paper currency” as being “characteristic of a well-designed CBDC.”

Last year at the WEF’s 14th Annual Meeting of the New Champions, aka “Summer Davos,” in Tianjing, China, Cornell University professor Eswar Prasad said that “we are at the cusp of physical currency essentially disappearing,” and that programmable CBDCs could take us to either a better or much darker place.

“If you think about the benefits of digital money, there are huge potential gains,” said Prasad, adding, “It’s not just about digital forms of digital currency; you can have programmability – units of central bank currency with expiry dates.

You could have […] a potentially better – or some people might say a darker world – where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like say ammunition, or drugs, or pornography, or something of the sort, and that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks.

The WEF’s Special Meeting on Global Collaboration, Growth and Energy Development took place from April 27-29 in Riyadh, Saudi Arabia.

“Saudi Arabia’s absolute monarchy restricts almost all political rights and civil liberties,” according to D.C.-based NGO Freedom House.

In the kingdom, “No officials at the national level are elected,” and “the regime relies on pervasive surveillance, the criminalization of dissent, appeals to sectarianism and ethnicity, and public spending supported by oil revenues to maintain power.”

Reprinted with permission from The Sociable.

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