Last Thursday, the European Commission hosted its flagship annual economic event, the Brussels Economic Forum, at Brussels’ Palace of Congress. The event included an Oxford-style debate on the motion that a “cashless society would be beneficial for people and the economy.” Speaking in favour of the motion was Cecilia Skingsley, head of the Innovation Hub at the Bank for International Settlements, the central bank of central banks. Speaking against was Brett Scott, a financial journalist and author of the book Cloud Money: Cash, Cards, Crypto and the War for Our Wallets.
But before the speakers spoke, the event’s attendees voted on the resolution. Somewhat surprisingly, a slim majority of 52% voted against the resolution while 48% voted for it. In other words, even at the very heart of the Brussels establishment most people believe that a cashless society would not be beneficial for people and the economy. And then the debate began.
Skingsley gave a somewhat underwhelming defense of the motion, arguing that we are at a technological tipping point BLAH BLAH BLAH
Brett Scott was far more convincing. He began his rebuttal of the motion by offering two metaphors.
Metaphor #1: The Banking System as a Casino
In the first one he compared the banking system to a casino: “like a casino, banks give us digital chips in exchange for our cash. Our confidence in that digital money is predicated upon access to cash. Ironically, if you undermine the cash system you simultaneously undermine public confidence in the digital system. Even if you don’t like cash, even if you perceives it to be inefficient you’ve got to realise that it actually underpins the digital system itself.”
“Imagine if a casino was going to prevent you from going back with your chips to redeem them for cash? That’s basically what banks do when they shut down ATMs: they’re saying we’re going to stop you from exiting our systems. You’ll have to use our digital chips. That’s why the cashless system is a euphemism for a type of enclosure by the banking sector and big tech.
Metaphor #2: Cash as a Bicycle
Scott noted that in the debates around a cashless society cash is often painted as a bygone product, much like a horse and cart after the advent of the motor vehicle. But in reality, he said, cash is the “bicycle, or even mountain bike, of payment systems.” Meanwhile, he likened digital payments to the “uber” of the payments universe.