Ask Chuck: Are we going totally cashless?

Dear Chuck,

My wife and I hardly ever use cash anymore. Do you think we are going to be totally cashless soon? Does it worry you as much as it does me?

Cashless Is Coming

Dear Cashless Is Coming,

We are and have been trending toward a cashless society for many years. And, yes, it worries me, but I am not sure if I am worried as much as you are. By the way, I do track this trend and have written about it in my book Seven Gray Swans: Trends That Threaten Our Financial Future.  Let’s walk through some trends before I answer your question about fear and worry.

Trends towards cashless

The Federal Reserve is researching and developing the use of a United States CBDC (central bank digital currency), which is set to arrive sometime between 2025 and 2030. Implementation would threaten financial middlemen, who earned $110 billion in transaction fees in 2020. Presumably, a downloadable app would allow citizens to make and receive payments. Some see this as beneficial in that it would give the unbanked (5% of American households) easier access to e-commerce and digital payment services. It would also allow the government to send payments to citizens for tax returns or economic relief.

On April 4th, the UK announced its vision for becoming a hub for crypto technology. They want to regulate some cryptocurrencies and recognize stablecoins for digital payments. The “coins,” less volatile than cryptocurrencies, are linked to traditional currencies or assets like gold. The UK thinks it will attract investment and create many new jobs. Stablecoins are already used in the United States for trading, lending, and borrowing of other digital assets.

BlackRock CEO Larry Fink says that the conflict in Ukraine could accelerate the development of digital currencies around the globe. “A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.” Just last May, he voiced concerns.

A report by accounting firm PwC (PricewaterhouseCoopers) reveals that 80% of central banks are considering, or have already launched, a digital currency. The Bahamas is the first country to launch theirs, the Sand Dollar, and the Jamaican Jam-Dex is expected to launch this year.

Prepping for cashless

Bear in mind, that none of these developments in digital money and/or cryptocurrency mean that cash will become irrelevant or unavailable. We know that the growing trend in cryptocurrencies and CBDCs will make it more likely, but it is not certain. We must not waste time in fear and speculation. However, there are a number of ways to prepare for a cashless society if that should happen. One is to grow in wisdom. It allows you to look at the facts and make appropriate decisions. If we do move in that direction, it will be wisdom that proves of greater value than our money. Secondly, our lives must not be defined or controlled by money. The Bible tells us over and over to keep our lives free from the love of money. Our true riches are stored in Heaven.

If we are ever forced to make a decision between operating in a cashless system and serving God, we will need to be prepared to lose all that we have to honor Christ above money. The Bible is so complete in its teachings about money that we learn in Hebrews 10:34 that we can lose everything on Earth with joy because we have “better and last possessions” beyond this temporal life.

Should we be worried?

Many people are justifiably concerned about privacy if cash totally disappears. They do not want the government to gain insight into their finances, and they want to prevent becoming victims of cyber-attacks. With the loss of economic privacy, the loss of economic freedom is soon to follow. However, surveys indicate that almost a third of retail transactions are still done in cash in the United States. It is not likely that this will go away as quickly as we may think for a couple of reasons: retailers want to retain the customers who use cash, and policymakers want to be sure that the “unbanked” are not discriminated against. 

Satan uses fear to rob our joy today and prevent us from being fruitful. Regardless if we are cashless or not, we know that God will never leave us or forsake us. We can live one day at a time relying upon our Lord to faithfully provide our needs, whatever form that need may become. 

God’s presence has and always will be unmistakable in global economic affairs, and this should be a comfort to you. I’ve written about it in my new book, Economic Evidence for God: Uncovering the Invisible Hand That Guides the Economy; I hope you find it encouraging.