Monday, 8 February 2016

The end of big denominations

A new report from a team led by banker Peter Sands has suggested that large denomination notes should be discontinued. This is because the notes are used by those engaged in criminal activities and tax evasion (not the latter isn't criminal).

I'm generally a fan of the cashless society as I think it enables a better notion of who is doing what in the economy, which in turn allows for a fairer redistribution of resources.

It is hard to imagine any legitimate uses for large banknotes. The only time I can recall coming across one was seeing someone having theirs confiscated when trying to pay it into a bank - they had been conned in the pub.

Carrying around or otherwise transporting large amounts of cash seems very unsafe to me - for some reason I feel really on edge if I have over £50 in my wallet (do I think people can tell or something?)

Some people, including many commentators on the guardian article on the report, suggest that as the author used to be a banker it is clearly part of a bank-led plan to further take over. One worry is that we will be too dependent upon banks to go about our lives, where these banks might go bankrupt or whose service might be disrupted.

This is a worry and we need governments to ensure that they are ready to step in to ensure that banking services are working for all citizens. But then this leads people onto the next concern: banks and governments are two parts of an elite that wants greater control over us and blocking access to anonymous cash will give them that power.

One response would be to deny this possibility but I won't take that line. The threat of an Orwellian state which controls all resources via client banks and can monitor or shut down any individual if they get out of line is perfectly plausible. But the un-sexy response to this is to demand openness of government, to hold politicians and bureaucrats to account and to be very careful about who we vote for. (I.e. not the likes of Donald Trump and other populist "strong-men" who show disdain for checks and balances).

There is a real worry that in a social media age simplistic messages and solutions dominate difficult but reasoned analysis. But this makes it all the more important to respond appropriately.

After all, new technology is going to continue to play a larger role in our lives; we just need to make sure it works for all of us and not just a minority. Disrupting criminal activities, particularly tax evasion, is one such way it can.

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