Bitcoin might just be a plausible response to the “war on cash” declared by governments around the world
Disparate collections of people around the world may find an unlikely common cause in 2017. They include Indians struggling with the effects of demonetization; Chinese currency speculators; Swedish pensioners; and desperate Venezuelans.
These groups are all enemy combatants in the war on cash being waged by governments around the world. Cash has the advantages of being accessible, inclusive, and largely surveillance-free. It also has a tendency to leak into unexpected places, which makes governments uncomfortable. They say killing off cash plugs the leaks, and besides, it’s technological progress.
But that means outsourcing the mechanics of money to banks, payments companies, and the growing coterie of fintech firms. And killing cash hurts not only black-marketeers but also ordinary people whose livelihoods depend on its flexibility and simplicity. If simple cashless alternatives, such as Kenya’s M-Pesa mobile money, were more widely available, those people would probably embrace them. But they aren’t.
Hence these groups of unlikely allies may also share an interest in an unlikely solution: cryptocurrencies, which enable secure, anonymous payments uncontrolled by any government or bank. Bitcoin, the oldest and most widely used cryptocurrency, has been rising steadily in value (even if it’s not entirely clear why). This week it almost hit an all-time high, only to suddenly crash; but overall its bull run looks way more solid than in past years.
Yes, the total value of bitcoins is still miniscule compared to a country’s money supply, and its wild volatility and arcane mechanics have led naysayers to predict its death many times over. But whether they’re Indian smugglers or Swedish pensioners, the people on the sharp end of the war on cash might be starting to find the idea of a stateless cryptocurrency controlled by no-one a little more attractive.
This was published in the weekend edition of the Quartz Daily Brief, our roundup of the world’s most important news and ideas. Sign up here to get the brief in your inbox each morning, tailored to your time zone.
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