What Is the War on Cash?
The "war on cash" is a catchphrase for government efforts to minimize or eliminate the use of physical cash.
This war on cash has been raging for more than a decades. It involves restricting or increasing the cost of using cash cash, or simply removing it from circulation. The goal is to incentivize (and eventually compel) the population to exclusively use digital payment systems.
Government officials sell the war on cash by touting the convenience of digital payments. They also claim that eliminating cash will help stop criminals who use physical money to evade tracking and detection.
But there is a darker side to the move toward a cashless society – the promise of control.
Imagine if there was no cash. It would be impossible to hide even the smallest transaction from the government’s eyes. Something as simple as your morning trip to Starbucks wouldn’t be a secret from government officials.
Without physical cash, the government and the government/cartel banking system have complete control of your money. That means banks and governments increase their control over you. They can collect maximum taxes and fees, they can track your purchases, and they can even manipulate your spending habits by imposing negative interest rates that effectively charge you for saving. In the worst-case scenario, the government could even shut off your ability to make transactions.
Needless to say, many everyday people like cash and the relative freedom it provides. In a worst-case scenario, they can at least shield their wealth by shoving cash under their mattresses. You can’t do that if there isn’t any cash.
Many governments have made moves in the war on cash. For example, in May 2016, the European Central Bank announced it would stop producing and issuing 500-euro notes by the end of 2018. Not long before the EU announcement, a former Obama economic adviser/ex-Treasury secretary floated the idea of eliminating the $100 bill in the US.
The following year, the International Monetary Fund (IMF) published a working paper offering governments suggestions on how to move toward a cashless society even in the face of strong public opposition.
More recently, more than a billion dollars worth of physical cash disappeared from circulation in Australia, according to data released by the country's central bank.
Some countries have taken even more aggressive measure. In 2022, Israel banned the use of cash in business transactions over 6,000 NIS ($1,700). Private cash transactions can’t exceed 15,000 NIS ($4,360). Any transaction above those thresholds must be made via digital transfer or a debit card.
Central bank digital currencies has taken the war on cash to the next level.
Digital currencies exist as virtual banknotes or coins held in a digital wallet on your computer or smartphone. The difference between a central bank (government) digital currency and peer-to-peer electronic cash such as bitcoin is that the value of the digital currency is backed and controlled by the government, just like traditional fiat currency.
China, Nigeria, India and other countries have already experimented with payment systems using CBDCs, and the Federal Reserve has rolled out a pilot program of its own.
The good news is you don’t have to play the game their way. You don’t have to become a casualty in the war on cash. You can take back some of that power. As SchiffGold precious metal specialist Joel Bauman said in an article, buy gold and silver.