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The Death of Cash?

Some of the biggest banks in the world have combined to produce a payment system called "Fnality".  The system is a blockchain based digital money similar to Bitcoin. It will be rolled out internationally in 2021 to registered financial institutions.

It is strange that the banks are pushing this system because, potentially, it allows peer to peer payments without the banks operating as intermediaries.

Fnality is new because it is supported by a basket of giant banks and eventually it aims for Central Banks to underpin the value of its "Utility Settlement Coin" (the USC).  This is a big step forward compared with other cryptocurrencies which have always found the conversion into real world currencies problematical.

At first any meaningful digital currency will have a limited roll out to ensure that it does not fall into disrepute but within a decade a successful currency will be used generally.  The end of cash is a perilous development.  The State need only revoke your access to the payment system and you will have nothing.  It is ironic that Bitcoin was developed with the ostensible purpose of removing the State from currency control.

Banks backing USC:

    Banco Santander
    BNY Mellon
    Barclays
    Canadian Imperial Bank of Commerce (CIBC)
    Commerzbank
    Credit Suisse
    ING
    KBC Group
    Lloyds Banking Group
    MUFG Bank
    Nasdaq
    Sumitomo Mitsui Banking Corporation
    State Street Corporation
    UBS

If digital currencies are inevitable and going to replace cash it is essential from the outset that there are a variety of such currencies with a complete ban on turning off payments and receipts by individuals.  Today turning off access might only be considered for evil individuals who threaten us all but tomorrow that individual could be you simply because there is a query about your tax return or balance of wealth or political opinions. Those denied access may literally starve.

17/2/2020


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