January 3, 2023 - 4:00pm

Over the last year, there have been nervous murmurings across the internet about the rise of cashless societies. While we may be grateful for the convenience of contactless or one-click payments, underneath something more sinister may be going on.

This is something that Scott, a former derivatives broker and author of the book Cloud Money, firmly believes. He worries about the rapid disappearance of cash, particularly since the pandemic when many businesses gave up on physical currency entirely. Cash use in the UK fell by 50% in 2020, with more than 23.1 million people in the country using virtually no cash in 2021 compared to 5.4 million people in 2018. 

These are extraordinary figures and something that Scott believes deserves more attention. He argues that the convenience is a consequence of an anti-cash agenda being peddled by the private sector:  

The banking sector itself, for a very long time, has been anti-cash and has been slowly trying to shut down the cash system because the banking sector runs the underlying account structures. And they also make fees from digital transactions and not only that, they get data.
- Brett Scott

Cash is real ‚ÄĒ and not just in the sense that it is physical. It is, in fact, the only money of which an individual (as opposed to a bank) has private control. Digital money is more like poker chips, in that the digital numbers in an account only turn into money when they are cashed at an ATM.¬† Scott asks us to imagine a world where it becomes nearly impossible to cash in:

Cash is like the bicycle of payments and digital is more like the Uber of payments[…] In the short term, you may think to yourself, “Oh, I like using Uber, it’s nice and convenient.” […] Imagine now the scenario where the only way you were able to travel was with Uber. Totally different story. Now, your entire transport system is under the control of an oligopoly player. You can’t move unless they decide you’re allowed to move. And so there’ll be massive resilience problems, exclusion problems, all sorts of problems that emerge from that.
- Brett Scott

The introduction of a CBDC (central bank digital currency) ‚ÄĒ something that Rishi Sunak touted in 2021 ‚ÄĒ would give ordinary members of the public access to first-layer money in a digital form. It may redress the hold private sector banking has over the whole payment system, but would it be a step in the wrong direction in terms of freedom and privacy? Scott finds the distinction somewhat irrelevant. In his opinion, anyone using digital money has already sacrificed their privacy:¬†

It’s interesting to see the public angst around CBDC right now, because that same angst should be extended to the existing digital money system, which is the contactless cards with the private banks. And those banks are gathering data on you all the time; they can also do censorship and surveillance. And actually, the government can order them to stop your transactions. Everything you can do with a CBDC can hypothetically be done with the normal bank system as well: it just may entail an extra step on the part of a government.
- Brett Scott

In an interesting recent development, however, it seems that thanks to the cost of living crisis a lot of people are now returning to cash as a means of budgeting more efficiently. A silver lining of sorts.