Sunday, April 16, 2017

IMF Issues "Discussion Paper" on a Cashless Society

Alexei Kireyev, the cashless society maestro
By Robert Wenzel

This is big.

A Russian-born senior economist with 24 years at the International Monetary Fund, who is now based in Washington D.C., Alexei Kireyev, has issued IMF Working Paper WP/17/71 titled. "The Macroeconomics of De-Cashing."

In the abstract for the 26-page paper, Kireyev writes that his report is "purely illustrative and is designed to provide a roadmap for a systematic evaluation of de-cashing."

Rather than "purely illustrative" for "evaluation" of the concept of de-cashing, though, I would call it a detailed exposition of what governments need to do to advance towards a cashless society and why it is beneficial for governments to do so.

To be sure,  Kireyev couches his paper in a cautionary form with regular use of "on the one hand this and on the other hand that" analysis, but a government technocrat tasked with eliminating cash is going to ignore all that and go to the meat of the paper which will provide him with a checklist of what he needs to consider to take a nation cashless.

In the paper, Kireyev defines "de-cashing" and explains why it would be beneficial to governments (my highlights throughout):

De-cashing is defined as the gradual phasing out of currency from circulation
and its replacement with convertible deposits.
De-cashing may help improve the transmission mechanism of monetary policy.... In particular, the negative interest rate policy becomes a feasible option for monetary policy if savings in physical currency are discouraged and substantially reduced. With de-cashing, most money would be stored in the banking system, and, therefore, would be easily affected by negative rates, which could encourage consumer spending.

In principle, de-cashing should improve tax collection by reducing tax evasion.
In Sweden, for example, with de-cashing the government has benefited from more efficient tax collection, because electronic transactions leave a trail. To the contrary, in countries like Greece and Italy, where cash is still heavily used, tax evasion remains a big problem.


De-cashing should help reduce illegal migration. With less currency in circulation,
employers that attract illegal immigration by cash payment would have fewer options to pay for their services off the books.
He then lists obstacles that may occur in moving toward a cashless society and how to deal with the obstacles:
[S]ocial implications of de-cashing can be substantial. Carrying cash is a human right and is written into constitutions, which therefore have to be changed. Social conventions may also be disrupted as de-cashing may be viewed as a violation of fundamental rights, including freedom of contract and freedom of ownership.


[H]ouseholds and small private businesses may see carrying cash and conducting anonymous transactions as their constitutional right. Their discontent can lead to social tensions, strikes, and, therefore, GDP losses...


 A targeted outreach program is needed to alleviate suspicions related to de-cashing; in particular, that by de-cashing the authorities are trying to control all aspects of peoples’ lives, including their use of money, or push personal savings into banks. The de-cashing process would acquire more traction if it were based on individual consumer choice and cost-benefits considerations.
He then suggests coordination amongst countries to advance de-cashing:
Coordinated efforts on de-cashing could help enhance its positive effects and
reduce potential costs. At least at the level of major countries and their currencies, the
authorities could coordinate their de-cashing efforts. Such coordinated efforts are, in
particular, important in the decisions to phase out large denomination bills for all major
currencies, to use ceilings and other restrictions on cash transactions, and to introduce the
reporting requirements for cash transactions or their taxation. For currency areas, a single decashing policy would be clearly preferable to a national one. Finally, consensus between the public and the private sector and outreach on the advantages and modalities of gradual decashing should be viewed as key preconditions for its success.
He then provides some insight into an early step taken by the United States to move toward decashing:
The U.S. Treasury considered re-issuing a US$500 banknote when the Euro 500 banknotes began circulating. However, after the recognition that such a banknote would fuel worldwide criminals, it was decided not to pursue this option.
He also tells us what Israel has under consideration in a move toward full decashing:
 In Israel, a special committee recommended a three-phase plan to restrict the
use of cash, limit the use of checks as a means of payment and exchange for cash, and
promote the use of electronic means of payment. Any violation of these limits would be a criminal offense.
Bottom line: Technocrats at global organizations, with the IMF spearheading, continue to push the advance of a cashless society which will make it easier for governments to monitor, control and tax their subjects. If there is one policy that must be moved to the forefront and battled, it is the cashless society policy. Decashing would be a major step on Hayek's road to serfdom.

Robert Wenzel is Editor & Publisher of and Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics and on LinkedIn. The Robert Wenzel podcast is on  iphone and stitcher.


  1. The last bill in circulation will be the $666 note. (I don't know what that means, it just sounds creepy)

  2. Well if decashing reduces illegal immigration, we shouldn't have to worry about it here in the US where the deep state is married to the concept of flooding the country with third worlders.

    1. This comment shows what a dumb shit you are. They can just implement a cashless society and track us and not use it to enforce immigration law.

    2. Add yet another benefit of immigration.

    3. How will a cashless society effect the demand for gold and silver in said society?

    4. @Mooris. That was sarcasm on my part you retard.

  3. The Bank of England and FDIC document on Bank Bail-Ins of December, 2012 was an early look at where this is headed, and squares nicely with how Greece (The creators of the western world) is the prima facie example of how this republic will be strip mined on the road to serfdom. Since November 16th, 2014 the G20 countries led by the Federal Reserve at their annual June meetings on forwarding cashless societies have telegraphed that the discussion is over. What you are witnessing in this article is the nudge before brass knuckles break your damn jaw.

    None of this is funny, and you had better wake the hell up to the fact that the National Debt was propelled higher by each successive President because they always intended to rob each and every one of us blind. They plan on leaving us with a wretched landscape to try and navigate with our own individual buggy Biometric Bank Card that will decide how tight the handcuffs will be.

    I am very grateful that Robert covers this material but we really have no say in the matter, our owners have decided the matter for us. When have people who are openly compared to vermin ever been allowed to voice an opinion?

    Speaking of vermin, the U.S. and Indian governments have made sure that between 65 and 95 percent of ATMs in Indian have remained free of cash for over five months. The U.S. Government, USAID, and the "Better Than Cash" propaganda have been conspiring for over a year to make India cashless by 2020. The catastrophe in India in regards to demonetization was spearheaded by our dear leaders in Washington, and was designed as a massive beta test on 1,300,000,000 people. Do any of you doubt for a nano second that they are going after us all in very short order?

    1. You're right, it's not funny. But I'm too stupid to do any better than joke. That's my job here.

    2. C. Mike

      I am not upset with you or anyone on Robert's sites, I am simply done with filtering my opinions any more than absolutely necessary. I have had it with the psychopaths who are shoving this dystopic nightmare down our throats, and I refuse to go along with it.

      I am 63 years-old, beat up by time and circumstance, and I have never been one to allow anyone to shove something unwanted down my throat. I am the type of person that if you insist on shoving something down my throat, or coerce me in any way, I would rather die that submit.

      I am not a big guy, I stand only 5'7" tall, but if someone will not leave me alone, my eyes will scare the hell out of them far more than Hall of Fame pitcher Randy Johnson. One man who can attest to that first hand is Charles Goyette, who blew off an economic, and demographic data base that I had created over a two year period. The database accurately predicted 4 and a half years ago the point that we are at right now. I gave him a sense of my disappointment in his distinct disinterest. Charles knew I had accurately predicted the last housing and banking disasters two full years before the events unfolded. But, he still blew me off. Oh well.

  4. "I am very grateful that Robert covers this material but we really have no say in the matter, our owners have decided the matter for us."

    It's still worth saying, "I see what you're doing, and it's wrong," is it not?

    "When have people who are openly compared to vermin ever been allowed to voice an opinion?"

    Now. That's one of the things the U.S. still has going for it. As for being compared with vermin, we can do that right back.