Electronic Concentration Camp of the Russian Federation: Dangers of "Cashless Russia"

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

All over the world there is a tendency to replace cash with non-cash. The monetary authorities (central banks and ministries of finance) are trying to convince society that this is both convenient and vital. Convenient - because payments and settlements can be made with one click via a smartphone or by attaching a plastic card to a reader.

Reduced, according to the authorities, the risk of theft of money. And for society, non-cash payments are a guarantee that the economy is "transparent". In such an economy, there will be no place for various antisocial elements involved in drug trafficking, people or human organs, as well as those who finance terrorism. Supporters of non-cash money believe that getting rid of paper bills will allow us to get rid of corruption and achieve full payment of taxes to the treasury, etc. banknotes, according to some experts, make up in different countries from 1 to 2% of GDP).

I think that such arguments are just a "smokescreen" covering up the true reasons for the concern of the monetary authorities with the problem of cash circulation. After the financial crisis of 2007-2009. the financial and banking world has entered a band of low interest rates, and in some places they have already gone into negative territory. Central banks of a number of countries (Denmark, Sweden, Japan), as well as the European Central Bank (ECB) have set negative interest rates on deposits. Gradually, commercial banks in a number of countries also switched to zero or even negative deposit rates. In other words, the bank used to pay the client for depositing money in the account, but now, on the contrary, the client is forced to pay the bank (similar to how people pay for placing things in a locker). In short, the reason for this unprecedented phenomenon was the "overproduction" of money.

Indeed, central banks in a number of countries have turned on their "printing presses" at full capacity, calling it "quantitative easing." They say that these measures, according to the plan of the monetary authorities, should revive the economy and reduce the risk of deflation. And it really smells of deflation. And what happens in this situation? There is no reason for clients to keep their money in banks; it is better to move it under a mattress, in a safe deposit box or in a home safe. Fortunately, in a deflationary environment, the purchasing power of money grows by itself. In Europe, there has been an outflow of clients from banks, while the demand for metal safes has sharply increased. Even banks are buying them, preferring to store part of their assets in a "cache" in iron cabinets and basements.

But the problem of fleeing from banks must be solved more fundamentally. So banks are lobbying for the authorities to make decisions on the accelerated ousting of the "cash" from circulation, its complete replacement with non-cash money. The set of measures in this area is standard: transferring salaries to employee cards, encouraging trade institutions to accept plastic cards (debit and credit) for payment, limiting the maximum amount of purchases of goods and services using cash, imposing commissions on transactions using cash, etc. The authorities even began to encourage (or at least not slow down) payments using mobile devices.

There is a double-edged sword. On the one hand, various systems of electronic wallets and electronic payments via smartphones and laptops are beginning to take a part of the profit from banks, since it has to be given to those companies that are not banks (Internet companies, mobile phone companies, IT companies). On the other hand, such non-bank monetary transactions become a catalyst for the accelerated refusal of society from cash (especially among young people, which is devoid of the "prejudices" of the older generation).

A number of countries are already close to eliminating the use of cash entirely. The Scandinavian ones stand out especially. In Sweden, for example, cash settlements of the total volume of transactions are within 2%. High share of non-cash payments in the USA and Holland - 63%. In France and Great Britain, this figure is slightly lower - 55%. In Stockholm and a number of other cities, shops have already appeared where nothing can be bought for cash. Payment can be made using plastic cards or mobile devices. Previously, the Swedish authorities established that the customer in the store should have a choice: whether to pay him in cash or non-cash. Last year, stores were allowed to trade exclusively using non-cash.

At the end of January this year, the Swedish Central Bank (Riksbank) unveiled a plan to completely abandon paper money. Vice President of the Riksbank Cecilia Skingsleystated that the kingdom could become the first country in the world to fully switch to electronic money. In Denmark, according to official statements, from January 1 of this year, the issue of cash paper money has been stopped. Apparently, the country expects to completely abandon cash when all bills become dilapidated and die a natural death.

The European Central Bank (ECB) also launched an active attack on cash circulation. In May last year, the ECB announced that it would cease issuing a 500 euro banknote. This is one of the highest denominations in the world of cash. ECB President Mario Draghistated that the indicated bill was allegedly very fond of criminals, not only in the European Union, but also outside it. He considered the termination of the issue of the 500 euro banknote as a significant contribution of the ECB to the fight against crime in the world.

America may follow in the footsteps of the ECB. Last year, The Wall Street Journal, the Washington Post and other reputable newspapers featured articles by the former US Treasury Secretary. Lawrence Summers, nobel laureate Joseph Stiglitz, other well-known American figures with proposals to withdraw the 100 dollar bill from circulation. "Promoted" economist Kenneth Rogoff published a whole book "Curse of Cash" (the title speaks for itself).

In India, in November-December last year, a monetary reform was carried out, which was aimed at identifying counterfeit banknotes and the cash that circulated in the "shadow sector" of the economy. Experts say that as a result of the campaign, the amount of cash in the country has significantly decreased, and the monetary authorities of India are not going to replenish it. By inviting tens of millions of ordinary citizens to become clients of banks and use non-cash money. In short, there is a massive offensive on cash around the world, involving politicians, Nobel laureates, the media, and officials of all ranks.

What is the situation in Russia? Our country is lagging behind world trends by all standards. In Russia, the electronic form accounts, according to experts, about 30% of all types of payments. This indicator has grown in recent years, but the pace is sluggish against the background of the world. The reasons are different.

In particular, the conservatism of Russian banks. On my own behalf, I will add that with deposit rates reaching 10% in some banks, and with rates on active operations (loans), often above 20%, the task of Russian bankers to drive citizens into a "deposit and credit paradise" is not so urgent yet. like in the West.

Another reason is the insufficient technical base so that it would be possible to carry out operations with non-cash money throughout the territory of the Russian Federation. For example, not all shops and retail outlets (especially in the provinces) have equipment that allows you to make payments using cards. I think everything is clear here. Plus, the population is insufficiently prepared to use the tools of non-cash payments. And if, say, our fellow citizens have somehow mastered the cards, then mobile devices for many are still incomprehensible exotic.

Our Russian leaders have an attitude to the problem of replacing cash with non-cash ambiguous … For some officials, this is indifference and indifference (they say, let everything go by itself). Others believe that we urgently need to catch up with the West and speed up the construction of a "digital paradise". Still others express their concerns and suggest not rushing. The most active lobbyist and "locomotive" of the "Cashless Russia" project, from my point of view, is the current Minister of Finance Anton Siluanov … The last time he spoke in favor of accelerating the transition to non-cash circulation at the congress of "United Russia" in January 2017. At the same time, a "information leak" occurred in the Russian media, according to which the government was preparing for very radical measures to combat " cache ».

The Vedomosti newspaper reported that it is proposed to limit the sale of cars, luxury goods and real estate for cash. Also, officials are considering options for a 100 percent (forced) transfer of wages to cashless payments. In February, the first deputy prime minister also began to deny these rumors. Igor Shuvalov, and vice prime minister Arkady Dvorkovich … The press secretary of the President of the Russian Federation intervened in the matter Dmitry Peskov … Unlike the aforementioned government officials, in his speech on February 21, he did not deny that a plan was being prepared to combat the "cache". This, in his opinion, is quite natural, since "Of course, many countries practice the absolute minimization of the circulation of cash, so this issue certainly deserves attention."

Officials think so. What about ordinary citizens? Opinion polls show that nearly half of citizens think nothing at all. Young people (20-25% of respondents) are actively in favor of non-cash money. Some of them do not have any "prejudices" in relation to plastic cards. And many would like to switch completely to non-cash payments using mobile devices as soon as possible. Cool and comfortable. And the costs are minimal. Both in terms of time and money (commissions may be absent altogether). But the most remarkable thing is that 30% of respondents are categorically against increasing the share of cash-free settlements. Some of them fear fraud. And this really happens. For example, in 2014, according to the Central Bank of the Russian Federation, 1.6 billion rubles were stolen from bank cards of Russians.

And some citizens look even deeper. They understand that giving up cash will mean losing the last remnants of freedom … For every step (monetary transaction) will be controlled by the bank. And, perhaps, by a higher authority, since commercial banks are not “on their own”, they are also in the sphere of financial and not only financial supervision. In other words, the liquidation of cash threatens an electronic banking concentration camp, the order in which will be more abrupt than in Gulag … The person will behave politically incorrect, they can simply disconnect him from the life support system. A non-cash account will be an extremely effective tool for managing a person.

What our most advanced fellow citizens suspect of a "cashless paradise", surprisingly, has long been described in various dystopias: Evgeniya Zamyatina ("We"), George Orwell ("Animal Farm", "1984"), Aldous Huxley ("Oh Brave New World") Ray Bradbury ("451 degrees Fahrenheit"), etc. It is surprising that the first of these novels ("We") was written back in 1920. Interestingly, our Zamyatin was a "seer" or "dedicated" (in the plans of the world's "owners of money")? Orwell and Huxley were definitely "initiates."Our well-read fellow citizens (mainly the older generation) understand where the wind is blowing, who creates it and who needs it. They remember the classic phrase from George Orwell: "Big Brother is watching you." The older generation, through their life experience, has comprehended the craftiness of the powerful and has no doubt that an era is coming along with non-cash money electronic dictatorship … The dictatorship of "classical" money is being replaced by the dictatorship of digital money.