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Anti-cash alliance suffers setback – Norbert Häring

There is a worldwide campaign by big players within the financial sector to eliminate currency in the hands of non- banks. This campaign has been justified on the grounds of combating money laundering – which occurs in association with a range of illegal activities. The counter argument is that restricting non- bank money to commercial bank deposits will give the banks more power and control in circumstances where they have engaged in criminal activity over a long period of time and have demonstrated that they simply cannot be trusted to operate in the public interest. The following short article by Norbert Häring discusses some recent developments in this campaign to eliminate cash. – Ed

Cash Machine (Spixey, Flickr cc)

The Better Than Cash Alliance (which comprises Visa, Mastercard, Citibank, Bill Gates, USAID) coordinates the global war against cash from New York. Now, the city council of the headquart- ers of the Alliance has decided to oblige all brick and mortar stores and restaur- ants to accept cash. The justification of the new regulation is a low blow for the alliance’s financial inclusion propaganda.

According to a USA-Today report, retail stores, restaurants, and bars will have to accept cash in the future. The new regulation gets in the way of a program of credit card company Visa, which is paying restaurants for going completely cashless.

Visa is one of the founding members of the Better Than Cash Alliance, which aims to eliminate cash worldwide. The alliance is based in New York. With generous donations, it obtained office space from the United Nations Capital Development Fund (UNCDF) and now misleadingly calls itself a “UN-based organization”.

The reasoning for the NY city council’s decision in favour of cash – financial inclusion – is a blow for the propaganda with which the Better Than Cash Alliance tries to justify its war against cash: they also argue with financial inclusion, pretending that taking cash away helps to integrate everybody into the financial system. “The marketplace of the future must take into account the needs of vulnerable New Yorkers,” wrote the law’s sponsor, Ritchie Torres, in a press release. Even those who do not have a bank account or do not want to pay the bank fees should be able to shop and eat everywhere. The New York City Council thus emphasizes that cash is the most inclusive means of payment because everyone can use it without special technical facilities and without extra costs. Making the use of cash harder, more expensive and more inconvenient – as the Better Than Cash Alliance aims to do – is anti-inclusive, not inclusive.

The U.S. government, also a founding member of the Better Than Cash Alliance, has even corralled the G20, the twenty most powerful governments and their central banks, into a Global Partnership for Financial Inclusion, which – with the Better Than Cash Alliance as a strategic partner – aims to push back cash.

New York city is the most symbolically significant city, but not the first one to prohibit the refusal of cash. Similar laws have been passed in the past by New Jersey, Philadelphia, San Francisco.

In Germany, the principle of freedom of contract applies. Private businesses can freely decide how they want to be paid, at least as long as the customers have alternatives and can therefore be assumed to also have freedom of choice.

Government agencies cannot rely on freedom of contract due to the lack of voluntary interaction. With a court case against the public TV and radio broad- caster Hessischer Rundfunk, which refuses to accept cash in payment of an obligatory radio fee, I have been trying to clarify that all public authorities are legally obliged to accept cash. The case is pending before the European Court of Justice. And the highest German administrative court has already given a favorable opinion. [01/26/2020].

Source: Real World Econ Rev, 27 Jan 2020

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