In the future, digital currencies should replace cumbersome physical money. Although governments defend that its introduction would help them detect criminals, they have a sinister motive that pushes them to put it into circulation and they do not speak much about it, assures experts from the consulting firm SchiffGold.
China caused quite a stir by launching its digital yuan. The new payment method received a boost when one of the country’s largest online retailers, Jingdong, announced that it had developed the first virtual platform capable of accepting it.
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The Asian country is not the only one to explore the possibility of putting digital currency into circulation. Sweden has developed its own electronic payment method and the European Central Bank is promoting the creation of a digital euro. The US authorities have also addressed the possibility of launching a digital dollar.
Digital currency is nothing more than a virtual ticket that exists in a wallet on your smartphone. These means of payment issued by central banks are backed by the state, just like traditional fiat currency. Different countries will offer all kinds of reasons to start using them more in everyday life, but the root of this bid will be “the war against cash”, says economist Thorsten Polleit.
In reality, each digital currency gives the government the ability to track and even control consumer spending. In addition, it will further facilitate the use of less popular monetary policies by central banks, including the imposition of negative interest rates, according to the analyst.
While many economists hail digital currency as an “innovation,” there are dangers lurking behind this digitization of fiat currencies. According to Polleit, the possible issuance of a digital euro will considerably accelerate the pace with which European countries will move towards “a regime of surveillance state”.
Today, many people use cash for transactions because they want to remain anonymous. Governments don’t like things they can’t control, and that’s a huge push to unleash a war on cash, according to the analyst.
Any government can easily track digital payments made with its own digital currency. When launched, the digital yuan pilot program offered Chinese authorities “a degree of control never seen with physical money,” Bloomberg reported.
Specifically, the Chinese digital currency could allow Beijing to more closely control purchases made through mobile applications, which are attributed to around 16% of the country’s GDP, according to the agency.
“The People’s Bank of China has also indicated that it could put limits on the sizes of some transactions or even require an appointment to carry out large ones,” said Aaron Brown, a cryptocurrency investor in conversation with Bloomberg.
For his part, Polleit points out that people tend to have cash because it offers greater liquidity. In the event of a power outage like the one Texas residents have just experienced or bank failures, people want cash on hand. And it’s what the Greeks lacked when banks began limiting their access to physical money during the 2008 financial crisis.
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“If only electronic payments are possible, the little that remains of financial privacy will disappear. The citizen becomes completely transparent, at the pleasure of the State and its beneficiaries,” emphasizes the economist.
As soon as the physical money is completely withdrawn, those responsible for carrying out monetary policy will be able to introduce negative interest rates to devalue the debt, Polleit also points out.
Governments and central banks claim that moving towards a cashless society will help prevent crime. But the real reason for the war against the traditional means of payment is to establish “control overall.” And Polleit warns that this is one of the milestones on the road to absolute communism.
“The issuance of a digital euro and the resulting consequences are undoubtedly another crucial step in realizing the Marxists’ vision of their desired revolution,” he concludes.