Cash’s greatest critics usually cite its anonymity as its most troublesome attribute, but with the growth in popularity of cryptocurrencies, a similar scheme is reproducing itself. Indeed, John Gapper of the Financial Times analyses the reasons why cashMoney in physical form such as banknotes and coins. More and cryptocurrencies seem to be gaining in popularity in his December 13th article “Bitcoin and cash cast a shadow over banks”.
“The fiercer the regulatory squeeze on banks, the greater the demand for other means of storing and moving moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More.” This might be for the criminal side of the appeal for anonymity. But these huge money launderingThe operation of attempting to disguise a set of fraudulently or criminally obtained funds as legal, in operations undeclared to tax authorities, and therefore not subjected to taxation. Money laundering activities are strongly pursued by authorities and in most countries, there are strict rules for credit institutions to cooperate in the fight against money laundering operations, to declare and report any transactions that could be considered suspicious. More schemes don’t explain the consistent growth of notes in circulation. In fact, the privacy and anonymity of cash – that is usually adopted by cryptocurrencies like BitcoinBitcoin is commonly said to be a cryptocurrency, a digital means of exchange developed by a set of anonymous authors under the pseudonym of Satoshi Nakamoto, which began operating in 2009 as a community project (Wikipedia type), without the relationship or dependency of any government, state, company or body, and whose value (formed by a complicated system of mathematical algorithms and cryptography) is not supported by any central bank or authority. Bitcoins are essentially accounting entries i... More – offers honest citizens an “escape” from their every purchase being monitored, while also providing a certain familiarity that they might not find with other paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More tools. Cash gives its users a certain reassurance, especially when trust in their own government is low. And it is a favored tool by those who don’t own much as it acts like an effective budgeting tool – it’s tangible and easy-to-use – and it doesn’t require them to have a bank account – an inaccessible service for many low-income families.
But let’s face it, anonymity is a recurring subject in the payments world, and it deserves a larger debate. As Gapper says, “judging by their liking for cash, cryptocurrencies and mobile wallets, many people appreciate having a shadow system”. And next time you pay for your morning coffee, it might as well become that cherished moment where you can literally disappear into the “shadows” from this hyper-digital, super-connected world – even if only for the length of a transaction.