Some Push-back Against The Plan To Eliminate Cash

May 10, 2025/ Francis Menton @ Manhattan Contrarian

On the to-do list of the progressives setting out the steps needed to perfect the world, right at the top we find “Get Rid of Cash.” That makes total sense. Use of cash for financial transactions is the source and enabler of human sin and failing almost without limit. Our free exchange (aka “capitalist”) system gives rise to endless varieties of undesirable activities, ranging from the criminal to the sketchy to the non-virtuous to the icky. If only we had a world without cash, all transactions could be forced onto electronic payment systems where they could be continuously monitored by the forces of good. The undesirable ones could be identified and stopped. What’s even the argument against this?

I had a couple of posts back in 2016 and 2017, here and here, covering the advocacy of one particular know-it-all, Kenneth Rogoff, who was calling for the forced elimination of cash. Rogoff was far from a nobody in this debate, having been, among other things, Chief Economist of the IMF and a big-time economics professor at Harvard. Since 2017 I have not much covered this issue, but the advocacy has moved on well beyond even Rogoff’s dreams. During the Biden years the big idea became the “Central Bank Digital Currency” — replacement of our humble greenbacks with “digital” (electronic) currency issued directly by the Federal Reserve. Of course, Treasury Secretary Janet Yellen became a big promoter.

Over the near decade since I wrote those two posts about this subject, the use of cash has declined significantly, with the strong encouragement, although mostly not the mandate, of governments. The decline has been more pronounced in some countries than in others. In the U.S., data from the Federal Reserve indicate that the percent of transactions involving cash declined from about 35% in 2015 to only 16% in 2024. Two of the countries where use of cash has declined the most are Sweden and South Korea. According to the latest figures I can find (Sweden and South Korea, both 2023), the percentage of transactions involving cash is around 10% in both those countries.

Which makes it interesting that suddenly Sweden, of all countries, has caught on that elimination of cash might not be such a great idea. Here are two articles from March, one from The Banker (behind paywall) and another from The Guardian. Excerpt from The Banker:

Sweden is backpedalling on its decades-long push to go cashless. The [reasons are the] threat of war, coupled with concerns about “signals” from the US under President Donald Trump. . . .

From The Guardian:

[I]n the context of today, with war in Europe, unpredictability in the US and the fear of Russian hybrid attacks almost a part of daily life in Sweden, life without cash is not proving the utopia that perhaps it once promised to be. Such is the perceived severity of the situation that the authorities are trying to encourage citizens to keep and use cash in the name of civil defence. In November, the defence ministry sent every home a brochure entitled If Crisis or War Comes, advising people to use cash regularly and keep a minimum of a week’s supply in various denominations to “strengthen preparedness”.

The two articles put the reason for the shift as “war” or “civil defence.” That’s a very good reason, but it could be stated even more broadly: a fully electrified payments system is subject to what is called a “single point of failure.” When the electricity goes out, the means to make payments completely fails, and remains out of action until the electricity comes back on. That could be in an hour, or a month. Meanwhile, what? In a system without cash, there is no back-up.

What could knock the electricity out? War — hypothesized by Sweden as an attack by Russia — is one possibility. Hacking is another. Grid instability is a third, exemplified by the recent outage in Spain and Portugal. Those countries got their grids back up within about a day; but increasing penetration of wind and solar generation on grids in major countries significantly raises the likely frequency of such outages, and the challenges of recovering from them.

And then there’s the issue of surveillance. The whole electronic payments system is subject to continuous monitoring by the authorities, all done in the background without any notice to you that you are being watched. I am regularly amazed at the willingness of almost everybody to submit to this surveillance (which you can avoid every time you use cash). After all, the authorities would never misuse this information, would they?

If you think that the authorities would never misuse information gained from transaction monitoring for political purposes, you need to look at the “debanking” scandals of the Biden years. Here is a December 2024 piece from the Telegraph providing some details, and listing some prominent victims. Donald, Melania and Barron Trump — no surprises there. How about Nigel Farage, the likely next Prime Minister of the UK? And how about large number of prominent figures in the world of cryptocurrencies? Hey, the Bidenauts deemed the whole crypto thing to be sketchy. And besides, a lot of those crypto guys might be Republicans. Aren’t those reasons enough to banish the industry from the banking system? From the Telegraph:

The alleged debanking of crypto entrepreneurs comes amid a years-long crackdown on digital currency business and their billionaire founders. Under the Biden administration, US regulators have unleashed a series of civil and criminal lawsuits against cryptocurrency exchanges. Those prosecuting such cases claim they are simply enforcing regulation or crackdown on wrongdoing. Yet critics claim it is part of a broader effort to target political opponents. [Mark] Andreessen claimed that it is not only businesses that have been impacted, but “just generally political opponents”.

The general surveillance by the authorities of all of your banking and credit/debit card transactions takes place under the USA PATRIOT Act, passed in the aftermath of the September 11, 2001 attacks. On May 7, Congresswoman Anna Paulina Luna of Florida introduced a bill called the “Privacy Restoration Act” to end that. From Representative Luna’s statement on introduction of her bill:

“For over two decades, rogue actors within our U.S. intelligence agencies have used the Patriot Act to create the most sophisticated, unaccountable surveillance apparatus in the Western world,” said Congresswoman Luna. “My legislation will strip the deep state of these tools and protect every American’s fourth amendment right against unreasonable searches and seizures. It’s past time to rein in our intelligence agencies and restore the right to privacy. Anyone trying to convince you otherwise is using ‘security’ as an excuse to erode your freedom.”

Representative Luna’s bill is at least a small sign of push-back against the pervasive surveillance state. I am not expecting the bill to pass any time soon, but it is encouraging to see at least some small signs of resistance. Meanwhile, you too can push back by using cash whenever possible.

Cashless Society Equals Government Control

By Robin Itzler 

Editor's Note:  This is one of the commentaries selected from Robin's weekly newsletter Patriot Neighbors.  Any cartoons will have been added by me.  If you wish to get the full edition, E-mail her at PatriotNeighbors@yahoo.com to get on her list, it's free.

A cashless society means government has more control over your financial assets, specifically cash. Yet, in America, more stores and businesses are posting signs that they are moving to cashless, which is also referred to as contactless. You pay with a debit or credit card (physical card or app) or you don’t make the purchase, get treated by the doctor or enter the facility.

But why bother dragging out your card or phone app when you can have a microchip implanted in your hand (NFC or RFID technology)? Reportedly in Sweden, some 6,000 people have already gotten microchipped.

Well, we’ve been microchipping our dogs and cats for many years, but that was solely in case they were lost. Putting a microchip in your hand so that you can make purchases (and thus have your hand containing much of your financial information), is very Orwellian.

Who knows how many other left-leaning nations will follow suit? Yet, recent blackouts in Portugal and Spain have reminded people that cash is king when there’s no electricity. Ditto for those who live where a natural event (earthquake, hurricane, tornado, or flooding) could destroy electricity for short or long periods.

The GOOD news is that nations are saying NO to becoming cashless societies: 

Hungary—Its Parliament just passed a constitutional amendment stating that paying with cash is a fundamental right.

Norway—Effective May 1, cash must be accepted or else the business will be heavily fined. Norway’s former justice and emergencies minister Emilie Mehl said:

“If no one pays with cash and no one accepts cash, cash will no longer be a real emergency solution once the crisis is upon us.”

Sweden—Just a few years ago, the nation was on the path to becoming a cashless society; however, it now has reversed the stand and urges citizens to maintain a cash reservoir in case of emergency (including war).

Read Corepay’s pros and cons of a cashless society and then decide. 

EU Push for Global Digital ID……U.N. to Govern AI

Kurt Zindulka 10 Sep 2023 

The world needs international digital ID systems like coronavirus passports and Artificial Intelligence should be regulated by a global body similar to the United Nations’ Intergovernmental Panel on Climate Change, European Commission President Ursula von der Leyen said on Sunday.  Speaking before the “One Future” session of the G20 Summit in India, the top Eurocrat declared that the “future will be digital” and therefore more globalist institutions will be needed to set boundaries and regulations............During her speech in India, Ursula von der Leyen went on to argue for the global adoption of “digital public infrastructures” along the lines of the coronavirus passport system the EU developed during the Wuhan virus crisis...............Speaking to Breitbart Europe in March, Romanian Member of the European Parliament (MEP), Cristian Terhes warned that the push for a cross-border digital ID system would result in the “Chinafication” of Europe.  Like Communist China, the EU is also looking to implement a Central Bank Digital Currency (CBDC), which could be used to impose the whims of Brussels on the different peoples of the 27-member state bloc..............To Read More....

The Unselfconscious Hypocrisy Of The Tech Mavens Who Want To Control You - By Vince Coyner -I’m a pretty average guy.......... I’m not troubled that I’m basically average; I’m troubled by what I must be getting wrong vis-à-vis the world around me. I say wrong because there’s an entire universe out there of people who are, by every objective measure, exponentially smarter than I am, but who think exactly the opposite of the way I do on practically every single issue. Guys like Bill Gates, Mark Zuckerberg, Jeff Bezos, Reid Hoffman, Pierre Omidyar, Sergey Brin, Larry Page, Craig Newmark and so many more...........No longer can Americans be allowed to decide how to heat their homes, fuel their cars, or protect their property. No longer can they be allowed to enjoy an American-centric foreign policy or manage America’s economy in a way that empowers Americans. No longer will common miscreants be held responsible for their actions, even as those who challenge mandates are crushed. No longer will students learn objective facts or study the Western canon, but they’ll be taught to change their gender on a whim...........

A local health department condemned me to vaccine reeducation camp - By Reb Peacher September 11, 2023 -Do the crime, pay the time—at least that’s what the county health department said to me when I went to fill out the necessary paperwork to procure religious vaccine exemptions in order for my children to attend school. In my “conservative stronghold” state, even a private school is forbidden from admitting students lest they present religious exemptions acquired by a parent through the government health department. Last Friday, when I capitulated to my abuser’s demands—whoops! I meant to say, when I went to satisfy legal requirements to uphold my personal convictions, little did I know I would become a prisoner of conscience. After checking in with the “clinic” desk, I was told to wait in the lobby. As a native English speaker seeking a religious exemption, I was a minority by far; the majority of the “clients” only spoke Spanish (requiring bilingual staff), and they were all there for welfare or subsidized medicine. (I sat there wondering how much this was costing me.)..........

How Congress Should Reform the Fed

Alexander William Salter  – May 18, 2023 @ American Institute for Economic Research

It’s very difficult for elected officials to hold the Federal Reserve accountable. Is that a problem? 

There’s a strong counter-majoritarian tradition in American politics. The Constitution itself strictly limits what simple majorities, acting through their representatives, can accomplish. Contemporary central banking’s “democratic deficit” could be a feature, not a bug.

While we should always be wary of populist passions, the Fed’s insularity from the political process plausibly creates more problems than it solves. No less an economist than Milton Friedman thought that the Fed should be brought under the supervision of the Treasury or Congress. Friedman worried the central bank’s “independence” made it a law unto itself, sheltered from the consequences of its habitual mistakes. As the economy struggles with historic inflation and a wave of bank failures — both of which the Fed should have prevented — it’s worth considering alternatives.

Constitutionally, the Fed is a creature of Congress. The legislature created the Fed in 1913 not as a substitute for the gold standard and the National Banking System, but as a complement. The Fed was supposed to serve as a quasi-public clearinghouse to facilitate emergency liquidity transfers between banks to make the US system less panic-prone. But the onset of World War I spelled the end of this relatively limited mandate. The Fed began experimenting with monetary policy powers to support the market for government debt. Thus began a process of mission creep that resulted in the Fed becoming what its earliest proponents promised the public it never would: a central bank.

It’s time for the legislature to re-assert its control. The Fed’s recent dalliances with social and environmental policy have nothing to do with its legal grant of authority. Climate change and systemic inequality are valid policy areas for the United States Congress, but unless and until it says otherwise, not for the Fed. Hence Congress’s first order of business is passing legislation keeping the Fed within its legally prescribed lanes.

Second, Congress should separately crack down on the Fed’s experimentations with a central bank digital currency (CBDC). This is a dangerous technology that would give the government unprecedented access to and control over private financial transactions. CBDC would not meaningfully improve the operation of monetary policy or the pursuit of financial stability. All it would do is grant central bankers the power to redirect the flow of commerce by, for example, selectively processing payments, or debiting accounts to stimulate spending. Congress should pull the plug on the Fed’s pilot program and make it totally clear that CBDC is not permitted, absent enabling legislation.

It’s also time for the legislature to reconsider the dual mandate. There’s no need for the Fed to focus on full employment separately from price stability. In a fiat money economy, aggregate demand (nominal spending) stability is all a central bank can reasonably influence. And price stability is a consequence of aggregate demand stability. (Yes, the possibility of supply shocks complicates this. But such shocks are by nature temporary, and historically are much rarer than aggregate demand instability as a source of economic malaise.) Congress should accordingly narrow the Fed’s mandate to keeping the dollar’s purchasing power steady and predictable.

Finally, Congress needs to fix the Fed’s bank oversight and last-resort lending policies. The Fed is supposed to regulate banks and discount loans when the need arises. It’s very bad at both. Fed regulation has not made the banking system safer. If anything, it’s contributed to “too big to fail,” which results in recurrent crises. 

As for discounting, the Fed refuses to make any serious distinction between the illiquidity and insolvency of its counterparties. Making emergency funds available to the latter rewards the reckless bank behavior that gets us into trouble in the first place. Congress should narrow the Fed’s regulatory concerns to maintaining adequate bank capital. It should also consider abolishing the discount window entirely. Direct loans are unnecessary. Open-market operations can keep the financial system liquid.

Whether we like it or not, the Fed is one of the most important — if not the most important — economic institution in the country. It must be made to serve the public interest. The Fed should adhere to the rule of law. Right now, it only adheres to the rule of central bankers. A congressional course correction is long past due.

READ MORE

Alexander William Salter

Alexander William Salter is the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business and the Comparative Economics Research Fellow with the Free Market Institute, both at Texas Tech University. He is a co-author of Money and the Rule of Law: Generality and Predictability in Monetary Institutions, published by Cambridge University Press. In addition to his numerous scholarly articles, he has published nearly 300 opinion pieces in leading national outlets such as the Wall Street Journal, National Review, Fox News Opinion, and The Hill.

Salter earned his M.A. and Ph.D. in Economics at George Mason University and his B.A. in Economics at Occidental College. He was an AIER Summer Fellowship Program participant in 2011.

Get notified of new articles from Alexander William Salter and AIER.

E.U. Pushes ‘Criminalization’ of Physical Cash with ‘Anti-Money Laundering’ Law

Peter Caddle 30 Mar 2023 

The European Union is in danger of “criminalising” the use of physical cash with its new anti-money laundering laws, an MEP has warned. Dr Gunnar Beck, a representative for the populist Alternative for Germany (AfD) party, has warned that the EU appears to be pushing for the “criminalisation” of the use of physical cash with its new anti-money laundering (AML) laws............Many within the parliament appear to be justifying the decisions as being an important step in curtailing criminality within Europe, though Dr Beck warns that the limits on cash payments now appear to have gone too far...................Things are even more strict in France, where residents of the country are legally prohibited from paying for goods or services with cash where the transaction would amount to over €1,000, a figure that even prices out many modern electronic devices, such as laptops and smartphones..............To Read More...

My Take - Absolutely disabuse yourself of any delusion about what this really is about.  Control!  Thought control!  Abject and absolute control of the citizenry by tyrannical governments and a total dissolution of any concept of democracy, or republican government.   At some point if this becomes implemented only those who subscribe to the latest government mandates and dedicates will be allowed to buy or sell.  Everyone else will be locked out financially until they submit.  Why is that so hard to grasp?  Why is that so hard to accept? 

 

Will Economic Freedom End this July

By Mike Konrad April 1, 2023

The scene is as old as history.  An individual fleeing persecution wants to cross a border. His or her life depends on being able to bribe a border guard, with some fungible valuable item: whether gold, cash, silver, diamonds, etc. Life depends on it.  If the trade is prevented, then all hope is lost.  From the dawn of time, currency was the one thing that governments had difficulty tracking.  I am not considering checks, bills of credit, something written. Those are easy to trace. I am  talking about real currency. Currency in one’s hand, cash pressed in the flesh. Bribery was always the province of the dishonest, but it often became the last resort of the honest: a war refugee wanted to cross a border before an invading army swoops in, a Jew wanted to evade a Nazi patrol, an Irishman wanted to get out of Ireland one step ahead of the Crown’s authorities. Cash became the vehicle of freedom. So what happens when that option is removed… by digital currency? What happens when fungible cash is made null and void?..............To Read More....

The War Against Cash, Part VI: The Case Against a Central Bank Digital Currency

February 8, 2023 by Dan Mitchell @ International Liberty

While I have profound worries about the future of fiscal policy, I wonder if developments in monetary policy are an even greater threat to individual liberty.

More specifically, I’ve written a five-part series about governments and their “War Against Cash.”

• In Part I, I explained that politicians and bureaucrats want to get rid of cash so that governments could increase taxes.
• In Part II, I warned that abolition of cash would enable a further shift to irresponsible and inflationary monetary policy.
• In Part III, I showed why proponents are dishonest when they claim that a cashless society will somehow reduce criminal activity.
• In Part IV, I debunked the arguments made by Kenneth Rogoff, a Harvard professor and leading advocate for cash prohibition.
• In Part V, I pointed out how the Canadian government abused its power to restrict access to money for political opponents.

Let’s build upon those arguments by reviewing some additional material.

In a column yesterday for the Wall Street Journal, Sean Fieler warns that abolishing cash will empower government.

Neel Kashkari, president of the Minneapolis Federal Reserve, questioned why Americans would support a CBDC. “If they want to monitor every one of your transactions . . . you can do that with a central bank digital currency,” Mr. Kashkari said at a conference last year. “I get why China would be interested.

 

Why would the American people be for that?” …For Democrats, the party of big government, the appeal is obvious. A CBDC would allow the federal government to spend more money, manage outcomes… It’s naive to think that a government that is currently combing through individual financial information will stop doing so when it has the formidable power of a CBDC. …Policy makers in Washington have a choice between preserving a bloated federal government or putting America back on a path to limited government. By uniting to stop a CBDC, Republicans can take the side of the American people.

Well stated, though I have learned through painful experience not to rely on Republicans to protect freedom.

Writing last year for the Foundation for Economic Education, Brad Polumbo also warns against digital currency.

…many governments have floated the idea of a “central bank digital currency,”…and new reporting suggests the Biden Administration may soon press forward with efforts to create a so-called “digital dollar.” …At first glance, government getting in on the crypto craze might sound fun, novel, or harmless. But it’s actually cause for serious alarm. …it would offer governments new, unprecedented ways to control citizens. To call the idea rife for abuse is an extreme understatement. After all, a central bank digital currency would allow the government to track your every purchase. It could also be easily used to restrict purchases. For example, imagine a future government deciding that gasoline must be rationed in order to address climate change. Your “digital dollars” could be made to stop working at the gas pump once you’ve purchased a certain amount of gasoline in a week. …If any of this sounds extreme, fantastical, or otherwise far-fetched… well, just look at China.

Last but not least, here are some excerpts from Elaine Ou’s 2016 column for Bloomberg.

…in a cashless society every transaction must pass through a financial gatekeeper. …This means that politically unpopular organizations could easily be deprived of economic access. Past attempts to curb money laundering have already inadvertently cut off financial services for legitimate individuals, businesses, and charities. The removal of paper currency would undoubtedly leave similar collateral damage. The crime-fighting case against cash is overstated. …if we’re going to cite unlawful transactions as a rationale for banning cash, it only makes sense to ban banks and accounting firms first. The one benefit of replacing cash with claims on cash is that a claim can be discounted, canceled or seized. That doesn’t sound terribly beneficial to most people, but this attribute is attractive to a growing contingent that wants to send interest rates into negative territory. …Physical currency gets in the way of negative-interest-rate policy because people who don’t want to accrue negative interest can simply store their cash in a safe. By confining the national currency to regulated account holdings, the government can impose a tax on savings in the name of monetary policy.

The last sentence in that excerpt should be etched in stone. Replacing cash with a digital currency gives governments the ability to engage in “financial repression.”

Is it possible that politicians and central bankers to get hold of this power and not abuse it?

Yes, that’s theoretically possible, but it’s very unlikely.

All too often, the history of government is to grab and abuse power during times of crisis.

And the ultimate insult to injury is that governments almost always instigate crises in the first place.

P.S. If you want a sneak preview at how governments would abuse power, it is very instructive to take a quick look at how India hurt ordinary people as part of that government’s war against cash.