Your Money, Their Rules: The Risk of Digital Currency
“Sorry, ma’am, but your card has been declined.” The cashier’s words wash over you as your face turns red. The people behind you are clearly annoyed—they want you to step aside so they can move on with their day. But you ask, “Why was my card declined?” You know you have more than enough money to cover a charge a hundred times that amount. What’s going on?
The cashier replies, “The new currency program says you’ve exceeded your monthly limit for alcohol and meat. I think you need to wait until next month to buy something in this category.” He’s referring to the new intelligent currency launched earlier that year, which replaced all physical cash.
You do a quick online search and discover that other people have been denied gas purchases or can’t order things online because they’ve exceeded their monthly carbon footprint. Why didn’t you pay attention to those articles warning this could happen during last year’s referendums? You’ve got friends coming over in a few hours, so I guess it’ll be tap water and sweet potatoes from the street vendor later. They still take cash. I think.
Could it become real?
Fortunately, that scenario isn’t possible yet. But if we’re not careful, it could be in the not-too-distant future—especially if we’re not paying attention to what’s happening with our money.
One of the main concerns about a fully cashless society is that the government could track everything we buy, sell, give, or donate at all times. You might say, “They already track everything,” and you’d largely be right. But the issue arises if, or when, someone decides that certain purchases should be off-limits—because of national environmental targets, because “it’s not good for us,” or because a new law limits how we can freely use our own money.
Before you say that could never happen, remember: recent conflicts between Russia and Ukraine resulted in Russia being almost completely removed from the global financial system, and sanctions restricted their ability to trade. How do they enforce those sanctions? By tracking the money.
The value of economic autonomy
The same thing happened to individuals sanctioned by Western governments. Most of their assets were frozen by government orders. Their only hope was to have physical cash or funds in banks beyond the reach of those jurisdictions.
Sure, few—if any—of us reading this would ever face that kind of government-level sanction. Unless, of course, this article is being reposted on OligarchDaily. So you might feel relatively safe about the shift from physical to digital money. But not so fast.
Just like in the example above, meat, alcohol, and gas were essentially sanctioned for consumption beyond a set limit—and the restriction was enforced by “intelligent currency” at the point of purchase. Governments tend to believe they know what’s best for us. And sometimes, they’re right. But should they have absolute control over our money in the future? Would money even be money in that kind of world?
There are plenty of proposals, projects, and initiatives pushing for cashless economies across the globe. The goals—reducing waste, corruption, and inequality—are noble. But we have to ask: where is the right balance for these new economic models? If they’re introduced without seriously considering the rights of the people who’ve worked hard for what they have, we risk going too far.
The balance between innovation and freedom
Even if monetary policy and economics sound boring to you, consider this:
The Cold War was driven by competing economic systems.
BRICS is about asserting economic sovereignty from the U.S. dollar across the Global South.
Most wars include an economic dimension aimed at punishing the opposing side through sanctions.
You’re reading Fast Company because you want to be better informed—to get that promotion, earn more, and buy what you want without artificial limits on your economic choices. Like enjoying alcohol and meat at dinner in a restaurant you drove to in the new car you bought with your raise.
If we don’t start thinking ahead about the next ten years, we might end up trading goods just to get around digital money restrictions. Do you really want to swap your watch for a restricted dinner order because you’ve gone over your monthly limit? Talk about a step backward.
Remember: if you’re not there to protect your rights, poorly reasoned laws and policies will happily take them unintentionally. Don’t say I didn’t warn you.
Originally published in Spanish for Fast Company Mexico:
https://fastcompany.mx/2024/11/28/dinero-digital-moneda-inteligente-riesgos/
