Loss of privacy is the price paid for a cashless society
Being made financially naked by a government whenever some official wants to take a peek is not something I would want. In fact, it looks like an assault on civil liberty.
Everyone wants a cashless society just like we all love the internet. At the Asian Financial Forum this week, a gathering of the rich and the great in finance and government, there was a virtual consensus that financial technology, or Fintech, will not only make it possible but desirable.
Financiers love it because they think we are on the brink of a new wave of financial innovations, you know, things like blockchain database, which is apparently something to do with digital currencies like bitcoin.
Government regulators love it because, let’s face it, they will be able to keep track of the financial activities of everyone. In a cashless world, criminals can say goodbye to money laundering, or so many governments think.
If there is a global consensus, it is this. Democratic or authoritarian, all major governments either want your money or at least want to keep track of it. If government surveillance can access all your electronic conversations and movements except for face-to-face talks, Fintech will be able to do the same with all your financial transactions, except for cash.
Some of these attempts may be crude, like the disastrous attempt by the Indian government of Narendra Modi to get rid of the 500- and 1,000-rupee notes. But the reasoning is the same.
Granted, fighting crime is not the only reason for going cashless. The influential US economist Kenneth Rogoff has argued that a cashless state would enable monetary policy to employ negative interest rates to combat deflationary recessions. That wasn’t possible during the global financial crisis when such policy could not go below zero rates.
I am no economist but I take his word for it. However, as a taxpayer, being made financially naked by a government whenever some official wants to take a peek is not something I would want. In fact, it looks like an assault on civil liberty. I can already hear the rebuttal: if you have nothing to hide, what are you afraid of? Well, it’s called privacy. Edward Snowden, anyone?
Hong Kong is apparently way behind electronically at 35 per cent of total annual purchases, compared to 80 per cent in Sweden. Our editorial today thinks we need to move ahead – fast. I hope we stay far behind. Call me old-fashioned but I love cash.