Digital economy excludes poor, is hostage to electric grid failure

Acashless society involves trade-offs and hard choices — like most public policy initiatives. There is a “dark side” to a cashless economy, which Elaine Ou, a San Francisco tech engineer and former University of Sydney lecturer, calls a “creepy fantasy”.

Writing for Bloomberg, Ou warns that banks can refuse transactions at their discretion. Politically unpopular organizations could be easily deprived. Attempts to curb money laundering have already inadvertently cut off legitimate individuals, businesses, and charities. “The removal of paper currency will leave similar collateral damage.”

“Money belongs to its current holder. It doesn’t matter if a banknote was lost or stolen at some point in the past. Money is current; that’s why it’s called currency! A bank deposit, however, grants custody of money to the bank. An account balance is not actually money, but a claim on money,” she believes.

Mikki Kendall, author of the forthcoming book Hood Feminism, writing an op-ed in the Los Angeles Times, believes the abandonment of cash puts the poorest at risk of further exclusion. The perils of a cashless society will fall heavily on the poor and nearpoor, she reckoned.

“Many impoverished people don’t have credit cards or bank accounts. The very poor can’t take plastic if they’re begging on the street. The cashless future won’t be easy and convenient. For too many, it’ll be a new hardship.”

Consultant Guillaume Lepecq makes a point about cash as survival. “Cash has repeatedly demonstrated its importance in times of crisis.” Writing in the News & World Report, he raises the question of natural disasters knocking out the electrical grid for days or even weeks. Cash enables affected residents to obtain critical supplies when the cashless system fails.