Submission + - Hong Kong Protests Show Dangers of a Cashless Society (reason.com)
schwit1 writes: It can be easy to take cash for granted, especially in a wealthy, developed economy. Those fortunate enough to live in a stable society usually suffer no lack of payment options. They are getting more advanced all the time, with financial technology (fintech) companies constantly developing new ways to quickly and cheaply make purchases and send money. It sometimes seems the days of old-fashioned cash, with its dormant physicality, are numbered.
Allowing cash to die would be a grave mistake. A cashless society is a surveillance society. The recent round of protests in Hong Kong highlights exactly what we have to lose.
We don't even need to contemplate hypotheticals of what a digital financial surveillance system would look like. China's ubiquitous social media and messaging service WeChat doubles as a primary payment method for millions of mainland Chinese. It's easy, it's effective, and it's integrated into every facet of Chinese digital life.
But Coin Center's Peter Van Valkenburgh calls apps like WeChat Pay "tools for totalitarianism" for good reason: Each transaction is linked to your identity for possible viewing by Communist Party zealots. No wonder less than 8 percent of Hongkongers bother with hyper-palatable WeChat Pay.
Of course, Western offerings like Apple Pay and Venmo also maintain user databases that can be mined. Users may feel protected by the legal limits that countries like the United States place on what consumer data the government can extract from private business. But as research by Van Valkenburgh points out, US anti-money laundering laws afford less Fourth Amendment protection than you might expect. Besides, we still need to trust government and businesses to do the right thing. As the Edward Snowden revelations proved, this trust can be misplaced.
Hong Kong is about as first world as you can get. Yet even in such a developed economy, power's jealous hold is but an ill-worded reform away. We should not allow today's relative freedom to obscure the threat that a cashless world poses to our sovereignty. Not only can "it happen here," for some of your fellow citizens, it might already have.
Allowing cash to die would be a grave mistake. A cashless society is a surveillance society. The recent round of protests in Hong Kong highlights exactly what we have to lose.
We don't even need to contemplate hypotheticals of what a digital financial surveillance system would look like. China's ubiquitous social media and messaging service WeChat doubles as a primary payment method for millions of mainland Chinese. It's easy, it's effective, and it's integrated into every facet of Chinese digital life.
But Coin Center's Peter Van Valkenburgh calls apps like WeChat Pay "tools for totalitarianism" for good reason: Each transaction is linked to your identity for possible viewing by Communist Party zealots. No wonder less than 8 percent of Hongkongers bother with hyper-palatable WeChat Pay.
Of course, Western offerings like Apple Pay and Venmo also maintain user databases that can be mined. Users may feel protected by the legal limits that countries like the United States place on what consumer data the government can extract from private business. But as research by Van Valkenburgh points out, US anti-money laundering laws afford less Fourth Amendment protection than you might expect. Besides, we still need to trust government and businesses to do the right thing. As the Edward Snowden revelations proved, this trust can be misplaced.
Hong Kong is about as first world as you can get. Yet even in such a developed economy, power's jealous hold is but an ill-worded reform away. We should not allow today's relative freedom to obscure the threat that a cashless world poses to our sovereignty. Not only can "it happen here," for some of your fellow citizens, it might already have.
