A Cashless Society Will Embrace Cryptocurrency

While I was skimming the investment news today I read a short article titled El-Erian: Our emerging cashless society may lead to a government-issued cryptocurrency like bitcoin.

Basically, the gist of the article is that the world is moving away from cash (just look at Sweden!) and eventually governments will use their own cryptocurrency.

Now I don't know who El-Erian is, but he hasn't done a bit of research as there have already been government-backed cryptocurrencies!

Government Cryptocurrencies

Ecuador launched the cryptocentavo way back in 2015, but just recently pulled the plug on the whole thing due to not many people using it.

Venezuela, amidst its own fast-collapsing bolivar, launched the PetroDollar (XPD)

Finally, Russia is working on its own cryptocurrency - the CryptoRuble - and plans to launch it in the middle of 2019. The CryptoRuble will not be mineable, it will be pegged to the Ruble, and it will be the only legal cryptocurrency in Russia.

But don't think you can't profit from it, as I have previously researched and written about a company called QIWI (like a Russian PayPal) that I believe is building the digital platform for the CryptoRuble and official exchanges.

Now Ecuador was probably not the best place to test out a cryptocurrency for daily use as I don't believe that the populace is very tech forward in that regard - but I have never visited so I may be wrong. Plus, some things come before their time, before the technology and world is really ready for it.

As for Venezuela, I don't think there is a soul on the planet that trusts the current government there - especially with matters of finance.

But now that the world knows about cryptocurrency and with a much stronger country like Russia, I think that the CryptoRuble will be the first to stick around for good.

Government Cryptos: Good or Bad?

I have to say it is bad for individual freedom.

While I think that decentralized cryptos are a very good thing for individuals, the government-controlled versions will give them direct access to the flow of money in the entire country.

A government that no longer issues physical cash and only legalizes their own cryptocurrency will allow them to track EVERYTHING a person does with their money. Add that to the dozens of other ways our personal data is collected and the government will know everything about you.

That's scary.

Why Government Control Of Money Is Bad

Then think about how your crypto wallet could be 'frozen' just like the government can freeze your bank accounts. If that happened to you in a country without physical cash, you couldn't even go down to the store to buy food for your family.

Don't think it can happen?

What about the times that governments directly seized money in people's bank accounts?

Greece took €1.6 Billion Euros from bank accounts in the first 5 months of 2016, and have been doing so for years.

Back in 2013, Cyprus took 40% of savings over €100,000 from ALL bank accounts in the country. I remember reading about a family that had just sold their house and were going to use that money to buy another when that happened. Nope, the government took it.

Heck, they were about to take 40% of ALL the money in the bank without even a minimum limit but pulled back from that at the last minute. A 'haircut' they called it. Not too dissimilar to shearing a sheep, don't you think?

Even people in the US wake up one day to find out that all their money has been seized and they haven't even been charged with a crime!

There are plenty of examples (warnings) from history. It doesn't have to be just bank accounts, governments around the world can and have seized personal property from innocent people.

How To Prepare

We are years away from a potential cashless scenario in which the only currency is a government-issued cryptocurrency.

Still, the future appears to be heading in that direction. So what can you do to have a little bit of insurance against this?

• Have bank accounts in multiple countries.
• Own precious metals (like 24k gold jewelry from Menē or coins and bars) or other highly saleable/tradeable items.
• Own decentralized cryptocurrencies that will hold or increase in value for years and decades.
• Become more self-sufficient (learn useful skills, create more of what you use in your life).
• Gather like-minded people into your social circle.
• Fight against any mention of the removal of cash in your country.

Liberty requires eternal vigilance, as Thomas Jefferson and others have said. Its foundation is a healthy respect for property rights and a constitutional-based rule of law. Heightened vigilance is always required.

I'm interested in what you think about this? Good, bad, or neutral? Let me know in a comment below.