IMF Confirms That It Wants to Remove All Cash From the Global Economy - Bitsonline

IMF Confirms That It Wants to Remove All Cash From the Global Economy

A recent paper by IMF analyst Alexei Kireyev reaffirmed the plans of the global policy elite to ‘de-cash’ the global economy, providing a roadmap for what lies ahead in the coming years.

Also read: Credit Cards Will Soon Read Your Fingerprints

IMF Calls for Cashless Society

The March 2017 policy paper argues for “a sweeping reduction of the role of currency, its cash component, in favor of transferable deposits” by promoting a soft line stance that “should be phased in steps,” with a focus on PR and continuing adjustments that have already been accepted by the general population.

These “uncontested steps” include “the phasing out of large denomination bills, the placement of ceilings on cash transactions, and the reporting of cash moves across the borders.” They have been accompanied by a familiar narrative, focusing on the supposed criminality that benefits from using legal tender.

The European Union called their €500 bill “an instrument for illegal activities” when announcing its phasing out, while in the UK many customers have had their attempts to withdraw large sums of cash refused by banks. In Australia, the conversation has focused on drug dealers and the hoarding of $100 bills, while India took an overnight hardline stance against corruption when demonetizing their large denomination bills.

This is Not What the People Want

india rupee cash currency billsDespite the narrative, the policies are still unpopular as many fear the privacy implications, something that Kireyev acknowledges:

“People may have valid objections … De-cashing … leaves both individuals and states more vulnerable to disruptions, ranging from power outages to hacks to cyberwarfare.”

The focus on cash and criminality has increased since the financial crisis of 2008. However it wasn’t until the 2016 publication of ‘The Curse of Cash’ by former IMF economist and Harvard professor Kenneth Rogoff, that momentum really started to build in the West.

Long thought to have the ear of monetary policy elite, Rogoff’s book argued for the phasing out of $100, $50 and even $20 bills despite a reliance on cash transactions by the lower classes and underbanked.

Taking Full Control Over Your Accounts

It is a movement that may hide an ulterior motive. According to economist and noted goldbug Jim Rickards, Rogoff’s book is “an elite step-by-step plan to eliminate cash entirely.”  With the world having gone deeper into debt since 2008, Rickards believe the next crisis will see a Greek-style freezing of the system instead of  more liquidity injections like we saw when Lehmann Brothers went bankrupt.

Hence the desire to turn cash into digital deposits. Not only does this allow banks to grow their deposit base, enabling a higher rate of lending, but it means in the event of a crisis, funds can be raised by forcing depositors to take a “haircut.”

In the world where these these restrictive policies are implemented gradually, the precedent has been set and a bank holiday that leads to an involuntary haircut will be the next step — as alluded to in the IMF paper.

Bitcoin is Not Money: IMF Analyst

For cryptocurrency advocates, the bank holiday scenario is an emblematic use case for Bitcoin, although the IMF doesn’t see it that way. Kireyev states that Bitcoin is not a form of electronic money (defined as using cryptography to authenticate transactions and protect data) because it does not meet the criteria, writing: “Bitcoin is not issued by a central bank and is not widely accepted as a medium of exchange.”

Bitcoiners may point out that issuance is considered a feature not a bug, and in the event of large scale de-cashing or a sudden Greece-style default event, the aspects of money that Bitcoin does fulfill may become vitally important to the general population. No issuing authority means that no government can change the supply schedule, and if central authorities decide to devalue or tax the currency supplies they control, it could be assumed that currency will flow into an area where that does not happen.

USD CNY bitcoin relationship

We have seen this with loose correlations between the devaluing Chinese yuan and spikes in the bitcoin price. We have also seen spikes on “Brexit,” which shows the market either values the autonomy of bitcoin or market makers are exacerbating the impact of particular news events. It may be a bit of both, but sometimes these trends are self fulfilling, increasing the use of bitcoin as a store of value.

Much of this remains hypothetical. However if we accept that de-cashing is coming, as Kireyev’s paper proposes, being aware of the what the policy elites have in store may keep you and your money a step ahead of the game.

Do you think there is a serious effort to remove cash from the global economy? What can we do about it? Let us know.


Images via Pixabay, reddit user u/_RME_

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