By: P.T.
The Bank of Slovenia announced on Twitter that the ECB and the national central banks in the euro area are studying the advantages and risks of the so-called digital euro. “We are interested in your opinion. What do you think of at the term digital euro?” they wrote.
We are publishing an essay written in 2016 on his blog Kavarna Hayek about the introduction of digital money by the current editor-in-chief of Demokracija, Jože Biščak.
Farewell to cash, farewell to freedom
When the National Assembly passed a law almost exactly two years ago banning the payment of cash bills over 5,000 euros, it was a step forward in restricting cash transactions. Under the guise of preventing money laundering was the state’s unfulfilled desire to control the citizen’s wallet, that is, the part of the money that remains for the individual in the form of taxes after theft. The ultimate goal is complete cashless business, which is nothing but a financial dictatorship. Any resemblance to Orwell’s 1984 is, somehow, purely coincidental.
Employees of a BMW store in Zhengzhou in northern China were surprised months ago when an owner of a smaller bar entered the store. Not because she wanted to buy the BMW 730Li, but because she brought 100,000 yuan banknotes with her. “People usually pay me with smaller banknotes. Now I have accumulated a lot of them and I decided to use them all at once to buy a car,” she told local reporters. She settled the difference of up to one million yuan (about 135,000 euros) worth of luxury car with a bank card, and twenty employees in the car dealership counted cash for six hours. Everyone was happy: the owner of the new car, who got rid of the annoying change, the sellers who collected the commission, the owner of the car dealership because he sold the car at a profit, and the state, which collected the tax from everything. It never occurred to anyone to just think about possible money laundering, crime, grey economy, corruption, or tax evasion because the car was paid for with cash. Such a thing is no longer possible in Slovenia and elsewhere in the European Union.
That Thursday, March 6th, 2014, it became clear once again that there is no one among the MPs, this elected political elite, who would defend the freedom of the individual. No one opposed the amendment to the law on the prevention of money laundering and terrorist financing, which lowered the threshold for cash operations from the then 15,000 euros to 5,000 euros. One of the few who objected was Jožef Horvat (NSi). He pointed out that this is an additional burden for business partners, as they will have to pay a commission for the payment made. The opposition MP also believed that the limit for cash transactions in the EU is set at 15,000 euros. But regardless, “those who launder money are talking about millions,” he said. Slovenia thus received one of the most unfree legislations in Europe, and Horvat later did not take part in the vote. It is one of those laws that makes it clear that professional bureaucrats, civil servants, and politicians do not care much about citizens and their freedom, but are primarily interested in controlling them. Even the salary paid in cash is expected to be a thing of the past soon.
The Ministry of Finance does not completely agree with such claims. “Cash is the most anonymous bearer of value, with which it is easiest to conceal ownership and the illegal origin of money. In most cases, criminals have large sums of cash at their disposal, which they want to place in the financial system and obtain legal origin through several different transactions,” they say at Mramor’s ministry, adding that the restriction on cash operations is intended to prevent the flow of funds stemming from crime into the country’s financial system and consequently reduce the risk of money laundering and terrorist financing. However, this does not mean that an individual should not have as much cash as s/he wants, as the limit of 5,000 euros applies only to the sale of goods and services, but not to transactions between individuals. So, a car buyer who has been saving money “in a sock” has two options: either s/he can deposit the purchase price directly into the seller’s account, or s/he puts the money first in his/her account and then transfers it to the seller’s account. However, if a citizen buys an apartment from another person, s/he can hand over cash to the seller. There is also no restriction on withdrawing cash from the transaction account, and for the time being, they are not considering the general introduction of cashless operations from the point of view of preventing money laundering and terrorist financing. However, banks must report to the Anti-Money Laundering Office any transaction in excess of € 30,000.
There is no information on how much assets Slovenian citizens have in cash. “There is an estimate of this and it ranges between two and three billion euros,” said the Bank of Slovenia (BS). It is the same with savings “in socks”. The central bank estimates that Slovenes have between one billion and two billion euros in their homes. And how much cash is in circulation? “Since the introduction of the euro until the end of 2015, over 200 million banknotes have been issued net (the difference between all banknotes issued and all returned by the Bank of Slovenia), with a total value of over 3.5 billion euros,” they say in the Bank of Slovenia, with the fact that Slovenia has a so-called negative issue for banknotes between five and 200 euros, which means that more of them were returned to the central bank than were issued. “This is mainly due to the migration of banknotes, as euro banknotes move freely throughout the euro area,” they said, adding that the share of cash transactions in stores is estimated to be between 50 and 55 percent of all payment transactions, which has not changed significantly in recent years. “Nevertheless, the long-term trend is for cash transactions to decline very slowly,” they estimate in the Bank of Slovenia. Which is, say, much less than in India, where 86 percent of cash transactions were made last year, and much more than Sweden, which has only about 25 percent of cash transactions and is considering switching to fully electronic payment transactions (read: They would ban cash).
Interestingly, even the Financial Times, a century-and-a-quarter-old famous financial newspaper that called for “cash retirement” last year because it is a “barbaric relic,” joined the international power chase against cash. In doing so, they are referring, you will not believe, to the left wing economist John M. Keynes, who described the gold standard as barbaric (which, for example, allows for low inflation, prevents excessive government borrowing, and prints money without value). Despite still very small amounts of cash in circulation, this, according to the Financial Times, can “cause great distortion of the economic system” and “the ability of central banks to stimulate a depressed economy.” So behind the governments’ desire to abolish cash lies not only the intention of greater control over individuals, but also the more sophisticated “counterfeiting” of money without value.
Cash can therefore (for now) also be understood as the control of citizens over the actions of the authorities (of course, governments want the opposite), and free disposal remains one of the symbols of freedom, and at the same time one of the last lines of defence against greed and dictatorship of obsessives with increasing control. The immense desire of the state, its bureaucrats, who have an armed repressive apparatus behind them, not only to collect half of people’s earnings, but also to control the rest of the money to know where, when, to whom, why, and how much it paid is appalling. Disposing of cash allows an individual to at least partially avoid control. What does the state care about, what do we spend our money on? And e-commerce provides a complete insight into the behaviour and actions of citizens. For now, this is just a wet dream of bureaucrats. But for how much longer?