A British journalistic trope involves the phrase “The pound in your pocket”, a derisory reference to the 1960s Prime Minister Harold Wilson’s use of it to try to persuade the public that a proposed currency devaluation wouldn’t affect them. Nearly six decades later not so many Brits carry physical pounds in their pockets as electronic transfers have become more prevalent, but the currency remains. So much so that the governor of the Bank of England has had to reassure the world that the pound won’t be replaced by a proposed “Britcoin” cryptocurrency should that be introduced.
Normally matters of monetary policy aren’t within Hackaday’s remit, but since the UK is not the only country to mull over the idea of a tightly regulated cryptocurrency tied to their existing one, there’s a privacy angle to be considered while still steering clear of the fog of cryptocurrency enthusiasts. The problem is that reading the justification for the new digital pound from the Bank of England, it’s very difficult to see much it offers which isn’t already offered by existing cashless payment systems. Meanwhile it offers to them a blank regulatory sheet upon which they can write any new rules they want, and since that inevitably means some of those rules will affect digital privacy in a negative manner, it should be a worry to anyone whose government has considered the idea. Being at pains to tell us that we’ll still be able to see a picture of the King (or a dead President, or a set of bridges) on a bit of paper thus feels like an irrelevance as increasingly few of us handle banknotes much anyway these days. Perhaps that act in itself will now become more of an act of protest. And just when we’d persuaded our hackerspaces to go cashless, too.
Header: Wikitropia, CC BY-SA 3.0.
A government can seize a digital bank note of yours without reaching in your pocket.
That’s why I’m against it.
It’s a crime in many countries to carry too much physical currency over a state or international border. We aren’t going back to the old days, the governments won’t let us.
It’s even a crime to pay with cash over a certain, lowish amount. Various European countries have a 3000 euro limit. Over that, it needs to be reported to the local tax agency.
Failure to report the transaction (buy the seller) to the tax agency is a crime. Paying with cash (even over a certain amount) is NOT a crime!
In the USA it is $10K.
Note, you actually do nothing, it is the seller who should do the reporting.
That’s not the case in Europe (as Meh already said)
granted there are legitimate fringe cases, but I believe the US limit for “monetary instruments” is $10,000.
For an article talking about how people don’t carry cash at all, I’d expect those routinely rolling with 10-large on airplanes etc are pretty rare.
I don’t know. $10k is close to how much you’d need for hotels and expenses if you took a family on a distant vacation. And that’s not even counting the plane tickets.
You can still travel in and out of the US with that much in “Currency and monetary instruments” but you have to report it. I assume someone gets a report when you try to bring a pile of
If this were 1974, that $10k would have the buying power of about $64K today. Back then you would have gotten some of it as Traveler’s checks, knowing that your hotel and the country’s currency traders would make it convenient to use them.
I used to use traveler’s checks will into the 80’s. It was nice knowing that if they were lost or stolen you were not out of luck.
We need to go back a bit on this one as society has become too much of a surveillance one.
The people in charge don’t seem to think so.
The figured out how to steal physical money out of your pocket ages ago, by spooky action at a distance. It’s called currency debasement. The Romans did it so much you can detect particles of their lead in the arctic. Nowadays we call it inflation, and the best PR to dismiss it is to pretend it happens completely by accident
Also: OI MATE, YOU GOT A LOICENSE FOR THAT QUID? I’LL CLIP YOUR NOGGIN YOU CHEEKY BLOKE
You’re Dick Van Dyke and I claim my 5 pounds…
They can even take your money for ransom, called Kontopfändung over here, because you are poor and couldn’t pay something. Can happen to anyone at any moment, one false decision and you have ten years of counting every cent. Yes, there are P-Konten here in Germany, but they come with their own bag of troubles.
Ask me how i know…
You forgot to mention about that ‘monster’ named Schufa.. ;)
I work in the payments sector in the UK, and have attended enough of the Digital Pound Foundation’s workshops to be very wary of stablecoins. All the promises given by governments and central banks today are meaningless when policies change tomorrow. Digital currencies allow for rules to be added that specific where and when they can be spent. It starts out with good intentions, but I doubt it’ll end well for the people. For example, state welfare could be issued with restrictions that prevent it being used to buy alcohol or tobacco, or aid could be provided with expiry dates to ensure that it isn’t saved, but is spent and put back into the economy. I have heard rumours of both of these being used in China, but I have no evidence.
Food stamps already work that way. You get a card that can only be used for food and some household items – except people then buy food or toilet paper etc. using the card in exchange for cash from other people, which they then use to buy alcohol and tobacco. If cash was eliminated, they would simply barter.
you can only buy food with food stamps. No toilet paper, no diapers. No household goods at all.
You also cant buy alcohol or hot food with them.
You may be seeing someone use their TANF(welfare) to purchase those items. States use the same card for both.
It is not like the serial number of every single note that enters or leaves a bank is not scanned and recorded anyhow these days in pretty much every country. The only thing that will be new is the granularity of the metadata harvested. Cradle to grave the metadata of every single transaction will now be recorded.
If you think of money as people converting time from their limited life here on earth into something that can be easily be traded, then at one level it would be interesting to see the ebbs and flow from the ultra poor to the ultra rich.
For banks, it is a bit like changing from a 1 frame a day, or a week, film to 10000 frames a second.
“The only thing that will be new is the granularity”
You say this in a dismissive way, and it’s so bad that I almost have to think that it’s intentional. As if that granularity is merely a difference of degree, and not a fundamental shift in people’s lives.
It’s kind of like saying that the government can take your photo every couple of years for a driver’s license, so what’s the difference if they put a 60 FPS camera in your house? Of course for that metaphor they don’t have to, we do it to ourselves, and we will probably roll out further encroachments into privacy according to that wildly successful model.
I guess that’s the real question: why would central banks care to go on the record, when they can get you to do it to yourself and avoid all accountability? Strange.
Great point. HaD is about as close to social networks as I’ll ever get. The hilarity is that of all the sci-fi dystopian futures they never really predicted that people would just give their privacy all away for… vanity I guess? But here we are. I never understood why and never will. best.
Oh, it’s much worse than pure geanularity of information. It’s possible to have per-token restrictions so, for example, 20% of your wages/UBI (my theory on the eventual carrot) will only be spendable on food and will either suffer negative interest or outright expire.
Plus, any undesirables (easily profiled thanks to all the new metadata) could end up in a mirror maze of restrictions. That is, the walls aren’t visible until you bonk your nose on them. Imagine a group of undesirables being identified and being restricted from purchasing any travel methods if more than a handful attempt to travel to one location (this kills the protest).
This is not the usual slow erosion of rights, it’s the final word in building an invincible hegemony.
Speaking of limitations, and without suggesting it’s good or bad, goods and services could need to be paid for in two sorts of coin simultaneously – one that represents money, and another that represents your UBI Carbon Allowance, where extra CA coins can be brought but you get so many gratis that expire per month/year: the important bit is they can’t be sold, only used to cover the carbon costs associated with a purchase.
/runs off down to the patent office/
I think despotic government is a more acute and severe risk to human safety than the effects of a slightly more fair carbon credit system. It is not possible to enable the latter without enabling the former by way of CBDCs.
It would also be possible to, by law, force a digital receipt to every transaction: that could get “interesting”.
About 95% (or more) of my transactions are cash. By occurrence, not value of course.
And I live in the Bos-Wash-Metroplex.
Paying $250 of the $500 in my pocket is a meaningful thing.
Waving a chip over a reader, which makes a virtual number count down some, is not.
Part of me wonders if the average American would have such insane credit debt if purchases on credit cards felt more “real”.
I’ve pondered the same thing. One of the more terrifying changes in my lifetime is the use of credit cards in slot machines. Not that the one-armed bandit was ever a good idea, but at least you ran out of quarters at some point.
Thanks. Now I have that picture in my head of 1980s teens and twens wiping their credit cards at the arcade cabs. “Pac-man and Galaga made me broke!” ;)
You laugh.
Went on a cruise year with my teenage son. He found the video arcade on ship…
“But dad, the games are free, you just have to swipe your room card.”
They were definitely not free.
If the amount you could spend a day was limited, or if you turned it into a game where you have points and lose some for spending over a set limit. Someone should do that.
I’ve gone back to using cash – it’s faster and easier.
Lately I notice how often I’m stuck behind some cockwomble futzing about with a phone for ages trying to pay for something.
I can’t imagine how a few seconds with a card is slower than two humans both counting money together twice. I can imagine that if it reads properly the first time, a machine taking your money can be almost as fast with cash as with a card, as long as it doesn’t take an extra twenty seconds to get through the change dispensing screen on the stupid machine. I can see the phone taking forever if someone’s struggling with it.
It’s almost always cheaper to use whatever electronic method currently gives the better percentage back, or even an upfront discount. Which means if you’re poor or just frugal, maybe paying on the phone saves you a few bucks on a grocery trip and is worth the extra time to you.
“I can imagine that if it reads properly the first time”
The percentage of time a credit card machine around me works the first time is less than 50%. Either the tap doesn’t work, or the swipe is out, or I have to sign here but the pen is missing…
Aaah, you must live in the USA! That’s the root cause of your problem here.
Umm, I was referring to reading the CASH the first time. Instead of playing the vending machine game where you insert the same bill multiple times, straightening it and praying each time.
Paying by phone won’t usually save you money, atleast not when you consider the sorts of shops which are only set up to take cash. Payment by phone happens in a more corporate connected (yes some small businesses too) establishment, paying by cash is particularly common on fresh produce open-air markets. Market stalls often take nothing but cash. yes market stalls are often only open on inconvenient days of the week, but the produce is good quality (like all the proper traditional fruit varities that the supermarket’s suppliers never bothered to try to cultivate) and cheaper than supermarket prices too.
While I do agree that getting a few percent back to get everything from the same place doesn’t necessarily save you money, it sometimes does, and usually in a place where it’s possible to pay with a phone, there will be at least as much of an incentive as with a credit card. Of course I like fresh products better, but it’s definitely not always cheaper, although it can be. It’s easier to make an example of eggs – the farmer’s markets can sometimes ask for twice the price but may or may not actually treat the birds any better. But others will sell for a perfectly reasonable price, so it just depends. Either way, it’s worth keeping in mind whether the transaction fee you make a seller pay is worth the amount you save by using that method over another. If you like the seller, maybe don’t go against each other’s interests by diverting money to a middleman.
Wear a shock collar connected to your bank account.
$ 10 zap you a little
$ 100 hurt, and
$ 500 knock you out for a solid 10 minutes ;)
For some people, things bought electronically are more “real”, because the online statement screen is like your checkbook used to be; it’s the place you can see your real balance and exactly what you’ve earned and spent at various times and places. Whereas cash is something you get out and then it shatters into bits of change and tips and donation boxes and vending machines and things.
If I check my bank account I see cryptic descriptions. x amount send using payment service y (doesn’t say for what company or what I ordered). Or it does say the company name, but not what was in by basket/cart. You’ll have to use receipts to be able to make an overview regardless if you pay with cash or digitally. With cash you can see the balance of your wallet in real time.
I sometimes still use cash and transactions do feel more real.
Increasingly few of us handle bank notes much? Only by a strictly literal, pedantic, and very out of touch reading.
Meet a poor person for once in your life. They work almost entirely on folding money.
True, but still less often than I have to wait for a (usually but but not always old) person to painstakingly count out coins to pay and/or count their change.
The above was a reply .says above. Don’t know why it got posted here
Cash is good, but maybe we should ablish the tiny coins. Inflation has so robbed all money of its value that the penny, the five-pence and such are now pretty pointless. The way to be quick with cash is for the buyer to hand over a sum rounded up to the nearest pound or the nearest 50p, and not spend too long scrutining the change that comes back (its usually a pretty insignificent quantity). Once you’ve got enough inconvenient small change piled at home you take it to a bank to exchange for more convenient denominations. I pay cash everywhere, but the only time I pay by summing up small coins is if I have to reach in to the depths of my coin pocket for something priced at say £20.35 to make the 0.35 part when I know I’ve already spent and £1 or £0.50 coins I had that day.
This is written from a European perspective, where debit cards are the thing for people at all levels.
The real scary thing is that digital currency can be tracked continuously. If you spent a dollar is a strip joint, they know. If you buy weed even where it is legal, they know. If you are a regular drinker, they know. How long before the insurance company changes your rates based on the food you buy or the alcohol you consume? At least now cash is an option and credit card use is a choice. With all digital government controlled currency, any amount of privacy is gone for good.
The subtle yet very important difference between “authoritarian” and “totalitarian.” The impotent stuffed shirts in power today always prefer soft power.
Correction: you spent money for something at a business which had a classification. Many merchants are only capable of the broadest classification.
“Meanwhile it offers to them a blank regulatory sheet upon which they can write any new rules they want…”
This.
100%. And they decide who is bad and who is good. Almost invariably, you become “bad” if you are against the current agenda for whatever reason. Welcome to the paradise, comrades.
“The state pinky-swears it won’t do what it is obviously gearing up to do, and has said over and over again that it’s something they’d really like to do.
They promise. For the moment. Of course they reserve the right to change their minds later, probably under another person’s face and regime name which they rotate out every some-odd years. They really can’t be held accountable for that!”
Reading the stated goals for the EU digital cash, privacy and offline transactions are a core part of it.
https://www.ecb.europa.eu/euro/digital_euro/features/html/index.en.html
I’m skeptical yet quite curious to see how they implement it.
Cash or cashless you both have exactly the same lack of control over how the government debases it, that should be the main concern.
Also one thing a fully “tracable” monetary system would get rid of is the shadow economy, which for honest taxpayers would mean a significant tax break.
No it wouldn’t. Governments don’t see increases in tax revenue as a point for reducing the tax rates, because they’re already running on debt and deficit in nearly every country. It would merely balance the books for a while, until the government comes up with more new expenses that absolutely require funding.
A government that spends more is more popular with voters, while a government that cuts spending gets blamed for being “right wing” and throwing the poor under the bus, because the cuts in spending affect the low level service jobs that were artificially generated by throwing “free” money around. That’s why government spending tends to increase over time until it reaches the point where economy and the tax revenue starts to go down because of the high taxation and misdirection of money.
The shadow economy would just find another way see bitcoin.
The goverment having that kind of power is far scarier than the shadow economy.
Worldwide currency devaluation reform, or seize of all persons money only click of a button away!
Even Nuka Cola bottlecaps are better option for me.
Brazil is pretty much a dictatorship nowadays, dressed as a democracy.
Our rulers are starting to introduce the “Drex” (Digital Real X) now, as the local cryptocurrency from the government.
But we are a long way in, since basically all the payments in the last 4 years are made by “Pix”, that is a fast and free transfer way “powered by Central Bank of Brasil”.
That’s exactly the danger, getting all things in the Central Bank, digitally, allows our corrupt overlords to control how we spend the money, by defining part of this money as a ticket to buy a exclusive thing (they say it is to control how people expend social money, creating a obligation to buy food only with it, for example).
Now what keep them to forbid their enemies to expend money with fuel or a flight or anything as a revenge very soon (as China already does with their Social Score), as the digital currency can be controlled by them?
That’s very very very different from what we had, since by having the money out of the Central Bank, we was able to at least do whatever we wanted with it.
But now they can even judicially lock your money in your accounts while a judge consider necessary to do so.
Bitcoin is the way to go, they can get rid of me but they will not touch my hoard, even if I’m gone, and I hope as soon as quantum become a real thing, we will have a free “Qcoin” going on too, so we can still have freedom from the Big Brother.
I seriously recommend you guys to fight against it too, as we are doing here in Brazil.
Freedom is the only true thing that matters, as without it, we got nothing.
Noted, so one has to become a politician to get away with anything.
Not anything, anything except disagreeing with the party
Or having too many parties…
The problem occours when the banks refuse to do business with you: no bank = no e-payment, no e-payment = no food
They did that already to Nigel Farage. Imagine then how many ordinary Joe Sixpacks already got the same treatment.
The angle that is always forgotten with digital currency is the fact that banks hate it. In the west most people probably have their money in a bank, where it is readily usable as an “e-currency”, which is actually an IOU from the bank. If people could pay online without involving a bank, then people would be less inclined to use banks, and banks would be in trouble since they would have less of other people’s money to loan.
(Not that I advocate for the collapse of the financial system, but a handful of companies de facto controlling people’s everyday use of money really isn’t all that great)
yeah that’s my main thought on it too. in order for it to work there needs to be effectively a neutral bank that everyone has an account with. in order to end cash, it has to be universal. it can’t be like a commercial bank that rejects customers with poor credit or bad identification papers. if they solve the technical and regulatory and social problems around creating such a resource, it would be directly confronting venmo and square and citi and visa and so on
so that’s why i think it can’t happen here…fundamentally, our government isn’t capable of that kind of action. at best, it’d be like the ACA, a bail-out for private banks…but since private banks don’t cover everyone, they won’t be able to get rid of the alternative cash-only markets.
UK GOV is keenly aware of this, and the new coin is supposed to not allow it to happen.
Over a decade ago here in the ‘land of the free,’ a man dared to create a commodity backed currency backed by silver with actual audited warehouse receipts. Because we are a ‘free people,’ the feds attacked this guy and took him to court. Look up the Forbes column: “Protecting Us From A ‘Terrorist’ Who Made Pure Silver Coins: The Bernard von NotHaus Case.”
Former congressman Ron Paul who ran for president in ’08 and ’12 wanted to abolish the Federal Reserve and federal income tax, but again, people prefer slavery to freedom. Businessman Hugo Salinas Price of Mexico has advocated for silver to be used as a parallel currency to protect citizens from government theft via inflation.
The sad thing is most people like being slaves and happily vote for that situation. I have a low opinion of my fellow ‘Muricans and most of humanity.
FIAT or Financial Instrument Administering Theft.
We don’t hate the government enough.
There was a marvellous bit of theatre about this in the UK parliament; a bunch of drones from the upper echelons of the Treasury were asked, bluntly, what problem it was designed to solve.
Much hummin’ and hawin’ and shuffling of papers ensued, but answer came there none.
Kuwait is requiring everyone to submit thier biometric data for digital ID’s and the first deadline was Sept 30. On Oct 1 they started locking down bank accounts on anyone who didn’t comply and on Nov 1 they will be completely locked out meaning they won’t even be able to go to the bank and withdraw money.
This is all about control, if the government doesn’t like that you speak out, protest or refuse a vaccine then you can be locked out without anyway to buy food. A digital prison and once your in you can’t get out.
Wow! Sadly though, there are people who will vote for this in Western countries.
“or refuse a vaccine”
Dude…
Well, they did offer to starve everyone who didn’t comply.
Actually, that would raise the collective IQ and sanity level of the population, but as a wet liberal, I think it’s a step too far for me.
Forced medical intervention “for your own good” has a rather sketchy history. Ethics don’t really count when you’re all-powerful and also believe yourself to be superior to the people you control.
16He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, 17and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.
There is no purpose for central bank digital currencies, they don’t offer any good advantage that regular currency does not have. They are a solution in search of a problem, or more accurately simply a problem concept in and of themselves. All they offer is the danger of more state control, think what Trudeau did to the truckers bank accounts was bad, a dogital currency could mae that worse.
Just so everyone knows, handling cash is free for a shop, with the exception of if they have to pay it in to, or take it out from, a business bank account. If they keep they cash they are paid to hand, for paying out change and such, or handing out wages, or for buying from any suppliers they use for whom payment is at time of delivery… then very little of their cash has to ever touch a bank and therefore doesn’t get a percentage deducted. ALL card transactions get a percentage deducted, I strongly suspect and CBDC would suffer this too. And the percentage deduction on card transactions is usually higher than the deduction involved paying cash in/out of a bank.
Also, whilst “legal tender” technically only means physical currency must always be accepted when paying off a debt… I do not believe a shop which went cashless could do anything about it (like the cops would tell them, “not our problem” if the shop phoned them) if a customer put down the exact change on the counter and walked out with the goods, the customer would afterall have just paid off the debt for the goods. A shop which goes cashless could end up exposing itself to a lot of hassle in this fashion, and would likely need to end up handling that cash anyway.
Protect physical currency, protect freedom!
Anyone heard of the Together Declaration, in the Uk they;re worth looking up as a an organisation fighting to protect the right to pay with cash. The Big Brother Watch charity also has a campaign against digital central bank currencies, they ask everyone to email their MP and explain why central bank digital currencies are intolerable.