ELECTRONIC MONEY & DIGITAL CASH
by Michele Pelossi
Will the currency of the future lead to a cashless society?
Just before the end of 2001, thousands of security vans have been crisscrossing Europe from one and to another carrying around countless tons of metal discs and paper slips. Airplanes carrying the same have been flying from Paris to Guadeloupe, Martinique, Réunion, Mayotte, Saint Pierre & Miquelon and Guyana. And other aircrafts have been flying from Madrid to the Canaries and from Lisbon to the Azores and Madeira. They all carried the new Euro coins and banknotes, source of headaches for police, security and bank officials.
Could all this have been avoided?
Since the early 1960’s there have been a great number of prophecies about the elimination of coins and banknotes as a means of payment. The predictions included a whole array of electronic payment systems. Some of these are nowadays in common use but other systems still remain in the dark box of science-fiction – although - from a purely technological perspective, they are absolutely feasible. Credit cards, debit cards and ATM cards are already part of our everyday lives. Prepayment cards and smart-cards are gradually being introduced, though quite a few obstacles still remain to be topped.
The main barrier is consumer resistance, as cash is still used more than any other means of payment. This resistance is partly motivated by privacy concerns. In fact, people are very concerned about the detailed record left by their non-cash transactions. Individuals are worried about indefinite entities accumulating and swapping data screening which books, magazines, newspapers, videos, drugs, cigarettes, drinks or food they buy.
How would you feel about your health insurance suspending the payment of your hospital bills triggered by a heart attack, given that they know exactly how much butter and other cholesterol-stuffed food you bought during the previous 15 years? Or how would you feel about your boss, wife, girlfriend or political opponents telling you exactly how many times you have rented or watched video-clips of Britney Spears, Jennifer Lopez or Pamela Anderson? Or how about the IRA detecting all possible information about your spending behavior? Worries of being tracked are definitely not groundless. All major credit card companies currently analyze their cardholders’ buying patterns in order to target their marketing and advertising campaigns. And credit card companies are not the only ones keen to gather, use or sell information to other marketers.
Will consumers overcome their reticence and ultimately move towards cashless society? The USA PATRIOT ACT (USAPA) signed into law by president George W. Bush on October 26, 2001 is definitely not helping them to overcome it. So one question keeps on turning up repeatedly: are there any alternatives to the ever-increasing control put into action by the system? Are we finally on the verge of George Orwell’s Big Brother controlled society?
The technical foundations for both social orders are ready to be brought into play. It is now merely a social and political question to know if the public wants a controlled society or if it wants self-determination. But one key problem is that the public is not fully aware of this choice. Or to put it in other words: the public is already being manipulated.
Returning to the previously asked question concerning the means of payment, it can be of some comfort to know that cryptographers all over the world are ready to launch an entirely anonymous digital means of payment. A means that provides the privacy of physical cash, merging it with the benefits of electronic payments systems: digital cash!
So, from a purely technological perspective the elimination of coins and banknotes is feasible. Of course massive investments in equipment and cards are required. But sufficient incentives to induce the economic system to accept such a substantial investment are still lacking, making a transition to a cashless civilization inevitably lengthy and gradual.
For numerous years to come, the role of digital cash will therefore more likely be that of a complement to, rather than a replacement for, physical cash. The ultimate solution of microchips to be positioned inside the human body or other biometrics settlement techniques are consequently to be placed back into the box of science-fiction, with an emphasis on fiction, since science already gives us most instruments to implement the endeavor.
Or as the Brits would put it: Cash is dead, long live cash!
Michele Pelossi is an Attorney at Law specialized in intellectual property, media and communication law. He is currently teaching media and communication law at the University of Lugano. Ancient objects have at all times fascinated him. In particular anything linked to the history of trade and commerce.
email: mpelossi@bluewin.ch
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