The need for a form of decentralized money like Bitcoin was just validated… again.
The reason: one of the world’s largest economics has just announced that it will be restricting large cash transactions, seemingly to eliminate crime, control the capital of their citizens better, and to force centralized digital systems on the masses.
China Seemingly Commences Death of Cash
The cashless world that some fear and some enamor is closer than we think. XinhuaNet — a branch of the official state-run press agency of the People’s Republic of China, Xinhua — reported on November 14th that the People’s Bank of China (PBoC) in Hebei Province, Zhejiang Province, and Shenzhen City will be commencing efforts to restrict the use of cash in the aforementioned regions.
This move will affect near if not more than 130 million individuals and a large portion of China’s GDP — Shenzhen is the nation’s version of Silicon Valley after all.
According to prominent cryptocurrency venture capitalist and commentator Dovey Wan, restrictions on cash transactions will take the following forms:
- Business accounts will be unable to deposit or withdraw more than 500,000 yuan (~$70,000) worth of cash
- Personal accounts will be unable to deposit or withdraw more than 100,000 yuan (~$15,000) to 300,000 yuan (~$40,000) worth of cash, depending on which province the individual in question is located in.
XinhuaNet’s article elaborates that the PBoC will also begin to gradually introduce and standardize “large-value cash withdrawal appointments, large-value access registration, large-value cash analysis reports, supervision and inspection systems” to further bolster their efforts.
The reason why this is taking place: the PBoC’s mandate to “fight major cash crimes and money laundering,” according to the article from the state-run news outlet.
Though this is not a country-wide experiment, it can be assumed that this pilot, should it be successful, will go into full effect across China. And with a form of Chinese digital money based on a centralized iteration of “blockchain” seemingly on the horizon, cash may be well on its way out the door in China.
China’s attempt to block large cash transactions is the most notable case of a government trying to kill cash, but this isn’t the only recent example of authorities forcing actively surveyed cashless payment solutions on their citizens.
Per previous reports from Blockonomi, Australia recently floated a decision to outlaw the use of cash in transactions exceeding the value of AUD$10,000, which equates to around $6,900. Those found in violation of this (honestly Orwellian) rule may be subject to up to two years imprisonment and/or a fine of $25,200.
A Cashless World Proves Bitcoin’s Value
So why is this bullish for Bitcoin? Simply put, people need privacy, and the restrictions being placed on cash as digital payment solutions have been pushed on consumers is a confluence that threatens the existence of financial privacy.
Sure, the death of financial privacy will eliminate criminals, but at what cost? Well, the cost of freedom, individualism, and thoughts that don’t abide by the guidelines put in place by governments.
Andreas Antonopoulos, a long-time Bitcoin educator, has likened the death of financial privacy to tacit censorship. This may sound harrowing. Hence Bitcoin.
BitMEX chief executive Arthur Hayes wrote in a company blog post earlier this year that the “censored, centralized, and top-down” digital monies pale in comparison to Bitcoin in one respect: its ability to fulfill one’s “moral and even psychological” need for the ability to keep information to oneself.
“Bitcoin runs via a network of voluntary, independent, and self-interested actors, who neither demand nor require any favors or permissions; a few basis points in transaction fees is literally all they want from anyone,” he wrote, drawing clear lines between decentralized and centralized forms of digital money.