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Are We On The Verge Of A Cashless Society?

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 Posted 06/15/2020  2:28 pm  Show Profile   Bookmark this reply Add redlock to your friends list Get a Link to this Reply
It's not surprising that Spain/Italy/France are trying to limit the use of cash. They have very high tax rates and tax evasion is a problem. It's also not surprising that a socialist government tries to get rid of cash.
Italy raised the limit for cash transactions some time ago. The low limit of 1000 was just unsustainable.

The high Euro denomination banknotes (200 and 500) were introduced because the northern countries of the Eurozone (especially The Netherlands, Germany and Austria) had similar high denoms in circulation and use. If the 100 note would have been the highest banknote it would have undermined the already low confidence in the new currancy in these countries even more.


That the high denoms have been mainly and mostly used for illegal things in Spain is not even a half-truth. Yes, 500 have been found by police raids. But the vast majority of notes is used for legal purposes. Several central banks have studied the issue and come to this conclusion. But the anti-cash lobby just ignores the facts.

Edited by redlock
06/15/2020 2:39 pm
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 Posted 06/15/2020  2:57 pm  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply
For me the real benefit of being cashless is efficiency (faster checkouts, thinner wallets). For government it is probably cost (no more printers, minters, engravers, etc).

I think crime is going to happen no matter what money looks like (real or virtual), so going cashless will not solve that problem and selling that as a reason to go cashless is futile.

If you think they want us to go cashless to track us, think again. With cameras and face recognition on the rise everywhere you are being tracked using cash just the same.
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 Posted 06/15/2020  6:54 pm  Show Profile   Bookmark this reply Add fistfulladirt to your friends list Get a Link to this Reply

Quote:
For me the real benefit of being cashless is efficiency (faster checkouts, thinner wallets). For government it is probably cost (no more printers, minters, engravers, etc).
One motion at the least, with cash. Cards - swipe, type, sign.


Quote:
If you think they want us to go cashless to track us, think again. With cameras and face recognition on the rise everywhere you are being tracked using cash just the same.
When you're a masker, there's no facial recognition. Don't carry a cell phone. You're invisible.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
Edited by fistfulladirt
06/15/2020 6:56 pm
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 Posted 06/15/2020  9:27 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply

Quote:
Italy raised the limit for cash transactions some time ago. The low limit of 1000 was just unsustainable.


What does that mean a "limit for cash transactions". In the US you can do a million cash transaction and it is perfectly legal, as long as you fill out the IRS form for any cash transaction over $10,000.
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 Posted 06/15/2020  10:43 pm  Show Profile   Bookmark this reply Add ikeyPikey to your friends list Get a Link to this Reply

Quote:
... With cameras and face recognition on the rise everywhere you are being tracked using cash just the same ...


Faces, shmaces ... it is the digital money that tells them who to track.

Cheers,

/s/ ikeyPikey
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 Posted 06/15/2020  11:01 pm  Show Profile   Bookmark this reply Add fortcollins to your friends list Get a Link to this Reply
Both supply and demand and governmental policy will determine whether (or possibly when) we become a cashless society. Consider:

Popular rejection of unpopular denominations drives elimination of the denominations. Examples: Two Cent, Three Cent, Twenty Cent, classic silver and all modern dollar coins, three dollar gold coins and two dollar currency.

Popular rejection of certain coins because of size or weight also drives them from circulation. Examples: silver treys, half dimes, Twenty Cent (too close to twenty-five cent), classic silver dollars.

Metallic composition and composition changes drive prior compositions from the marketplace. Examples: large cents, Trade dollars, all 90% silver after CNC introduction (Gresham's Law).

Governmental de-monetization or redemption policy changes drive coins or currency from the market. Examples: removal of legal tender status for Trade dollars, termination of redemption for gold certificates and silver certificates, and gold coin confiscation.

Commercial demand changes drive denominations from the marketplace. Examples: casino elimination of physical coins eliminated the remaining need for half dollars and large size dollars; lack of vending machine demand for cents and five cents reduces circulation of those coins.

Inflation drives denominations from the marketplace. Examples: cent, five cent, and increasingly ten cent coins are accumulated in jars and cans, rather than carried for commerce.

Replacement of coin bank rolls with coin commercial rolls drives less useful denominations from the marketplace. Examples: armored carrier bank rolls carry a surcharge for banks, as do return bulk coins. Many banks decline to sell rolled coins or to accept bulk coins for exchange. Most of these banks still reluctantly accept bulk coins for deposit.

More frequently-seen limits on use of coins or currency will suppress circulation. Examples: governments can (and frequently do) prohibit more than a certain quantity of coins for specific transactions, such as paying traffic fines. Businesses can (and frequently) do the same for unwanted denominations.

Either the global pandemic or significant inflation could lead enough merchants to refuse to accept coins or currency to make coins and currency unnecessary in commerce.

The reality is that our economy could function with just four coins and no currency: twenty-five cent, one dollar, five dollar, and twenty dollar. At least for now, the vending industry needs twenty-five cent coins. Lightweight plastic one dollar coins with security features and redemption limits (e.g., <$20 per transaction) could circulate. Heavier five- and twenty-dollar coins would circulate out of necessity, and would have the salutary benefit of impeding street-level drug dealing without need for more policing, arrests, courts, or incarceration. Transactions could be rounded to the nearest twenty-five cents, with no disruption in the economy. (To the objection that items would be priced at 13 cents, 38 cents, 63 cents, or 88 cents to take advantage of upward rounding, remember that the gross transaction would be rounded, and the two decimals of the gross transaction would tend to balance the net annual transactions.)

This is a long-winded way of saying that the pressures to reduce or eliminate coins and currency are starting to outweigh the pressures to maintain them. The end result very likely will be eventual elimination of coins and currency.
Edited by fortcollins
06/15/2020 11:08 pm
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 Posted 06/16/2020  12:33 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply

Quote:
The reality is that our economy could function with just four coins and no currency: twenty-five cent, one dollar, five dollar, and twenty dollar. At least for now, the vending industry needs twenty-five cent coins. Lightweight plastic one dollar coins with security features and redemption limits (e.g., <$20 per transaction) could circulate. Heavier five- and twenty-dollar coins would circulate out of necessity, and would have the salutary benefit of impeding street-level drug dealing without need for more policing, arrests, courts, or incarceration. Transactions could be rounded to the nearest twenty-five cents, with no disruption in the economy. (To the objection that items would be priced at 13 cents, 38 cents, 63 cents, or 88 cents to take advantage of upward rounding, remember that the gross transaction would be rounded, and the two decimals of the gross transaction would tend to balance the net annual transactions.)


I think this position is extreme. The only countries that do not have a coin the equivalent of a nickel are Sweden and Norway. All four major currencies, USD, EUR, JPY, and GBP have the equivalent of a penny.

South Korea is planning to replace all coins with plastic cards in two years. The banknotes they have a roughly the equivalent of the $1, $5, $10, and the $50. As a practical matter the use of cards instead of coins will radically reduce the number of three smallest denominations of banknotes, because most store purchases will be via the card. The ~$50 banknote will probably become more popular.

Between 85%-90% of the US banknotes in circulation is in the $50 or $100 denomination. While it is true that a large percentage of the population never uses a banknote higher than $20 I think you are forgetting about the massive international usage of the $100 banknote. The US government will not easily give up that income.

Casino chips typically weigh ten times the weight of a banknote. A casino chip is usually heavier than a 2 euro coin, and is more comparable to a 2 coin. Why would you think that we should replace banknotes with coins?

I do favor a coin with RFID worth $1000 that you are required to report when you come into possession. I think there is a need for large value money that is both physical and traceable. While it would not be universally popular, it would take some of the pressure off the BEP to produce $100 banknotes.
Edited by PacoMartin
06/16/2020 12:47 am
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 Posted 06/16/2020  09:52 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
One motion at the least, with cash. Cards - swipe, type, sign.
Nope. Tap phone to terminal. Done.

(Note: some call it "tap to pay," but you do not need to make actual contact, just get within a few millimeters.)

For card users who swipe or insert card (EMV chip), nothing under $25 requires a signature.
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 Posted 06/16/2020  10:24 am  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
Sweden poses a good lesson on how difficult an actual cashless society is to achieve. Sweden has been virtually level or decreasing in cash in circulation from 2001 to 2017. The Guardian tells the story of the migrant bicycle repairman, recently started taking electronic cash after tiring of having to find creative ways to get around the $1000 weekly limit on depositing cash into machines.
But instead of cash decreasing forever, it seems to have reached a low point and now has been edging back up.

The Swedish 500kr banknote worth $51 is commonly used in ATMs. There are currently 83.8 million in circulation up from 63.9 on 31 January 2018 (that's a 31% increase).

While phone apps and electronic money transfers can create a "low cash society", a "cashless society" does not seem to be the inevitable result.

A "cashless society" seems like it will require new laws.
Edited by PacoMartin
06/16/2020 10:32 am
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 Posted 06/16/2020  3:19 pm  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

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When you're a masker, there's no facial recognition. Don't carry a cell phone. You're invisible.
I mean this with sincerity and respect, as long as people like you are around the US will not be cashless, de facto or de jure.



Quote:
Faces, shmaces ... it is the digital money that tells them who to track.
It does not matter how we make payments. We are being asked for personal information while we are watched by video. This data is tracked, analyzed, enumerated, and most importantly monetized. Data is a commodity and they continually refine the processes so it is worthwhile for us to surrender our data. (The billions of smartphone users have already done this.) Anonymous cash payers might just be the last frontier.



Quote:
A "cashless society" seems like it will require new laws.
I have said before that cash could be eliminated by the stroke of a pen, but I do not think that will ever happen.

I do wonder though, if the government stops printing/minting money and eliminates the fiat backing, will people still give value to the cash that remains out there? (Earlier I wondered if the shift to cashless could be compared to when money was debased).

I still believe, as I have said many times, that cash will eventually disappear on its own in time as society evolves to take advantage of newer and more efficient technologies. The only question is how long that will take. Ten years? 100? 500?

To be clear, I personally like being cashless. I like that it is my choice. I would never advocate forcing that choice on another with legislation.
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 Posted 06/16/2020  9:44 pm  Show Profile   Bookmark this reply Add fortcollins to your friends list Get a Link to this Reply

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Between 85%-90% of the US banknotes in circulation is in the $50 or $100 denomination. . . .

Casino chips typically weigh ten times the weight of a banknote. A casino chip is usually heavier than a 2 euro coin, and is more comparable to a 2 coin. Why would you think that we should replace banknotes with coins?


Two key reasons. First, see my comments on impeding street level drug dealing. That's where some of the $20+ currency demand ends up. It's far more difficult to run down a street with $1,000 in heavy coins than with $1,000 in currency. Ditto for transporting physical cash out of the country by plane. Impeding the street level drug dealers would force more electronic drug transactions, which are much easier to intercept. Replacing currency with heavier coins, particularly followed by demonetizing the currency, would absolutely impede local drug dealers. Doing this without the associated costs of increased law enforcement, courts, and jails would be a budgetary societal benefit, which is a significant factor in driving governmental policy.

The second point of the heavier coins would be to push the economy toward electronic transactions. This is the intersection of government policy and supply and demand.

I never carry more than $20 on my person, and I very rarely use cash for anything. It's inconvenient, and results in my receiving a handful of shrapnel back in change.

Proliferation of Coinstar machines and equivalent coin-dumping devices shows that people are willing to pay others to take their coins. We are at the threshold of the opening phases of moving to an eventually coin-less existence, and the pandemic concerns are raising the potential for an accelerated currency-less future, as well.
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 Posted 07/03/2020  12:54 pm  Show Profile   Bookmark this reply Add PacoMartin to your friends list Get a Link to this Reply
https://www.banking.senate.gov/hear...and-payments
FULL COMMITTEE HEARING
The Digitization of Money and Payments
DATE: Tuesday, June 30, 2020 TIME: 10:00 AM

THE COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS will meet REMOTELY to conduct a hearing entitled

"The Digitization of Money and Payments."

The witnesses will be:
The Honorable J. Christopher Giancarlo, Senior Counsel, Willkie Farr & Gallagher LLP and former Chairman, U.S. Commodity Futures Trading Commission;
Mr. Charles Cascarilla, Chief Executive Officer and Co-Founder, Paxos; and
Professor Nakita Q. Cuttino, Visiting Assistant Professor of Law, Duke University School of Law.

Pursuant to guidance from the CDC and OAP, Senate office buildings are not open to the public other than official business visitors and credentialed press at this time. Accordingly, in-person visitors cannot be accommodated at this hearing. We encourage the public to utilize the Committee's livestream of the hearing, available on the website at http://www.banking.senate.gov.

Crapo Statement at Digital Currency Hearing
June 30, 2020
WASHINGTON - U.S. Senator Mike Crapo (R-Idaho), Chairman of the U.S. Senate
Committee on Banking, Housing and Urban Affairs, delivered the following remarks at a
virtual hearing entitled, ""The Digitization of Money and Payments."
The text of Chairman Crapo's remarks, as prepared, is below.
"Today, the Committee will hear testimony on the digital transformation of money and
payments.
"We will discuss how it has enabled more efficient technologies, ushered in new players
and business models, and raised important questions about what the rules of the road
should be and the federal government's appropriate role.
"Testifying will be The Honorable Chris Giancarlo, Senior Counsel, Willkie Farr &
Gallagher and former Chairman of the U.S. Commodity Futures Trading Commission;
Mr. Charles Cascarilla, Chief Executive Officer & Co-Founder, Paxos; and Professor
Nakita Q. Cuttino, Visiting Professor of Law, Duke University School of Law.
"Welcome to our witnesses, and thank you for joining us today.
"The COVID-19 pandemic has forced us all to 'go digital' at rapid pace, turning to our
phones or computers to work, shop, communicate, and provide or receive services.
"This has highlighted the incredible innovation of banks, fintech and payment
companies to facilitate commerce at speed and scale.
"It has also challenged us to reexamine issues of financial inclusion, and consider
different ways to think about money and payments.
"New technologies, like digital wallets and mobile money transfers, have greatly
increased the availability and ease of electronic transactions.
"Often, these services are layered on top of traditional payment rails and rely on core
nonbank payment systems as means of settlement.
"Because many of these services require consumers to hold a preexisting bank account
or card, some believe they may be limited in their ability to expand the population of
financial services consumers.
"Financial innovation has attempted to fill that need by creating entirely separate
payment systems based on their own digital currency and distributed ledger technology.
"Cryptocurrencies have long claimed the ability to provide faster, less-expensive
payments on a global scale, with some degree of anonymity.
"More recently, a new type of cryptocurrency has emerged aimed at achieving these
benefits while marginalizing the volatility of some of its predecessors.
"Stablecoins, which may be issued by a central entity, deliver price stability by having
their value pegged to another asset, like commercial bank deposits or governmentissued
bonds.
"Still, there are legitimate questions about certain stabelcoins and digital currencies
more broadly, such as the degree of oversight, impact on the transmission of monetary
policy and disruption of banks' traditional financial intermediation.
"The Financial Stability Board (FSB) recently reported that stablecoins could pose
financial stability risks if offered and used by a large, existing customer base.
"Nothing amplified these concerns more than Facebook's announcement of the Libra
project last year.
"To be sure, the cryptocurrency ecosystem is as diverse in its products and functions as
the rest of financial services.
"And as I said in our last digital currency hearing, it seems to me that these and similar
innovations are inevitable, beneficial, and the U.S. should lead in their development.
"The U.S. currently regulates digital assets based on their activity and employs a 'same
risks, same rules' principle. Some states have taken further steps in designing their
own oversight regimes.
"The U.S. must have clear rules of the road in place that protect businesses and
consumers without stifling future innovation.
"Acting OCC Comptroller Brian Brooks has recently raised the idea of a federal
payments or digital currency charter.
"The OCC is also seeking input on a variety of areas important to fintech and digital
currency, aimed at supporting "the evolution of the federal banking system" and its
ability to meet needs of customers and communities.
"This includes: barriers to further adoption of crypto-related activities and distributed
ledger technologies in the banking industry; new payments technologies and processes
the OCC be aware of; and innovative tools for complying with regulations and
supervisory expectations, also known as 'regtech.'
"I am interested in learning more about these and other strategies towards a consistent
U.S. framework.
"In the meantime, adoption of electronic payments and the growing scale of digital
currencies has led to calls for digital fiat, a so-called 'central bank digital currency,' or
CBDC. This is being explored by many major central banks.
"A CBDC could take many forms. For example, former Chairman Giancarlo has
discussed a tokenized U.S. dollar that could be issued by the Fed and function next to
cash, central bank reserves and commercial bank money, which we will discuss more
today.
"No matter its form, a U.S. CBDC requires methodical consideration and U.S. regulators
have begun this work already.
"Fed Chair Jay Powell has raised several potential legal hurdles, like whether the Fed
has the underlying authority to issue a tokenized dollar; how the rights and obligations
of system participants would be determined; and potential effects on the U.S. dollar as
the world's reserve currency.
"Another critical consideration is the role traditionally filled by banks and other financial
institutions.
"As trusted intermediaries, these firms perform several services critical to the safety and
stability of the U.S. economy.
"As the federal government explores CBDC, it must consider the innovation and
competition already demonstrated in the U.S. payments sector.
"During this hearing, I look forward to hearing more about efforts being undertaken by
different groups in the development of digital money and payments; design, operational,
and risk considerations in their development; what specific problems a CBDC should
resolve that are not currently being or cannot be addressed by the litany of payments
innovation already completed or underway; and what the rules of the road should be."
###


Edited by PacoMartin
07/03/2020 12:55 pm
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 Posted 07/04/2020  11:23 am  Show Profile   Bookmark this reply Add ACWhammy to your friends list Get a Link to this Reply
Is anyone not talking about the coin shortage yet?

https://www.pennlive.com/business/2...hortage.html

By the way, that post above me is very telling. People need to be aware of the fact that the government has every intention to convert to digital currency, thanks so much for sharing.
Edited by ACWhammy
07/05/2020 01:11 am
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 Posted 07/04/2020  1:03 pm  Show Profile   Bookmark this reply Add keith12 to your friends list Get a Link to this Reply

Quote:
Is anyone not talking about the coin shortage yet?
I have almost $1000.00 in pocket change I'm sure. I think the only ones talking about it is the CRH'ers
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 Posted 07/05/2020  02:30 am  Show Profile   Bookmark this reply Add redlock to your friends list Get a Link to this Reply
What or who are CRH'ers?
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