What a Cashless Society Forebodes for the Future

The Government May Soon Control and Limit All Our Transactions

I felt a bit creepy, like I was spying on my wife, even though I wasn’t even engaged with anything she was doing.

There I was, writing away at my home-office desk, and my iPhone dinged. Up popped an alert from my debit card, which she carries with her when she’s away from home. A purchase for €2.50 at some café along a beach near our apartment here in Portugal.

My wife Yulia was out jogging with friends, and, apparently, they’d stopped for refreshments.

I didn’t really care. But the alert struck me oddly. I immediately thought, “Would Yulia see this as me tracking her? Keeping tabs on what she’s up to when she’s not at home?”

It’s a thought that has stuck with me now for a couple weeks, not because I’m worried about her activities. It’s more that I’m worried about my activities.

And just to be clear, I don’t do anything unseemly. But I do things that some observers might frown upon.

Like, I probably drink too many Red Bulls (shush—they give you wings!). I probably eat a McDonald’s double cheeseburger and fries too frequently. Maybe I buy too much meat over the course of a month.

To me, these are my choices. This is my life. If I’m not hurting anyone, then my consumption of Red Bull and Mickey D’s is of no concern to anyone (other than Yulia).

But—and this is the point of today’s dispatch—the world we’re quickly moving into might just change all of that.

See, we’re rapidly progressing toward a cashless society. And I mean that literally. We are a few years away from never again using bills and coins to pay for our purchases. We’ll never again see bills and coins in our daily life.

Every dollar we spend, and every dollar we earn, is going to live on the blockchain, the infrastructure on which every cryptocurrency in the world runs.

Soon enough, the blockchain will also service so-called Central Bank Digital Currencies, or CBDCs. Just about every major and minor country in the world is pursuing a CBDC at the moment, including the U.S. Some countries already have CBDCs in place, most notably China.

These blockchain-based national currencies will function exactly like currencies function today. Our personal finances won’t differ functionally. We’ll still earn and spend dollars just as most of us do today, meaning employers will deposit paychecks directly into our bank accounts, and we will spend our paychecks by way of debit cards, and credit cards, and direct debits for mortgage, utilities, and whatnot.

Life will seem unchanged.

But life will be very much different behind the scenes, which is where my affinity for Red Bulls and double cheeseburgers might raise eyebrows.

On the blockchain, nothing is private. Everything is visible. The amount of money you earned and who paid you. The amount of money you spent, where, and on what item. Sell granny’s old collection of Hummel figurines at an estate sale, and digital cash flowing into your digital wallet will appear on the blockchain.

And the Eye of Sauron—government—will see all.

In theory, Sauron could simply fashion a law that compels the IRS to look into your digital wallet every year and compile all the money you collected from every single source—including the sale of those Hummel figurines—and determine that is the income on which you will pay taxes.

The IRS will just send you a notice that you had $X amount of income flow into your digital wallet, and you owe $Y in taxes… which the IRS will conveniently extract from your wallet for you.

You will have no recourse. The blockchain will have outed you.

In my case, what if Sauron’s medical minions (most of whom are theoreticians and not practitioners) decide that more than one Red Bull per week is harmful to my health, and thus, illegal, and limits the ability of my wallet to pay for a second?

What if they decide two double cheeseburgers per month is all that is allowed, based on some bogus medical BS? (And, yes, bogus medical BS is endemic in America, which explains why one year whole milk is bad for you, but then the next year a new study declares it’s perfectly fine because it protects the brain and improves cognitive function.)

What if Sauron and his governmental buddies around the world decide that to address climate issues, each person is only allowed to fly four times per year, or X number of miles per year? What if employers track the blockchain and see that you spent money on a cardiologist or a cancer specialist… and then decide to single you out for higher healthcare premiums?

A foreboding future, yes.

But entirely possible and already feasible on the blockchain.

Sauron is already telling us that he will take privacy into account as rules and regulations take shape in preparation for a CBDC world.

But this is Sauron. There’s a reason Ronald Reagan said, “The nine most terrifying words in the English language are:  I’m from the government, and I’m here to help.”

What can we do about this?

That is, perhaps, among the weightiest moral and philosophical questions society must grapple with over the next few years. Because we will have a CBDC dollar—the digital dollar—before the end of the decade. Period.

Financial privacy will evaporate, or at the very least worries about financial privacy evaporating will be the root cause of great angst among consumers, businesses, and human rights organizations.

I do not trust Sauron to do the right thing. It’s not in his nature. Information is the greatest power in the world and Sauron wants to know everything. He will most assuredly lie and gaslight to achieve that end.

Best advice I can offer you right now: Get to know so-called “privacy mixers” and “privacy exchanges” that are beginning to populate the cryptosphere and which allow users to anonymize their crypto transactions.

The world will see huge demand among people seeking to bring financial privacy back into their lives, and these mixers and exchanges are quite likely to become very—very!—popular in the near future.

In the meantime, load up on gold and bitcoin.

Both are going to see remarkable new highs as CBDCs take over.