You hand over a tendollar bill for a beef patty and a cup of instant coffee. It’s earlymorning, you’re running late, and you’re looking forward to a littleliquid motivation. The cashier counts back a series of silver coins andyou push them into the depths of back-pockets, or the dark recesses ofyour purse. You smile, repeat pleasantries; they do the same.
Did either of you really stop tothink about what just took place? Your morning routine is actually partof a complex ritual that most of us take for granted.
Money is a unit of trust. You and thecashier both understand that these trinkets have value, and that thisvalue can be traded for everything from Rock Cakes to Range Rovers. Weuse cash everyday – we pay for food, we hand it out to strangers on thestreet, throw it into upturned hats to support street musicians, depositit at ATMS, we even stick it into ticket dispensers to ride the bus –but we rarely, if ever, think about it.
We’ve already talked about theorigins of money – from mammoth Yap stones to cowry shells – but theseare always side notes. It’s baffling to think that we can so easilydismiss towering limestone wheels as a unit of payment, but we stillclutch cash.
Paper money is one of the biggestdesign failures of the modern era. It rips, gets soiled, gets forgottenin jeans and powered through the wash. It gets screamed at for hidingunder sofas, or being crumpled and left loitering in places it shouldn’tbe. It’s as easy to steal as it is to counterfeit and contributes toevery imaginable crime on this blue planet.
1. Dirty Money
There’s a reason our parents taught us to wash our hands after
touching paper money – it’s a petri dish of bacteria. Cash trades
countless hands in a single day – touched, counted, fondled – put places
we don’t want to really talk about in polite company. A group of
researchers from Wright Patterson Medical centre swapped out 68
shopper’s unclean bills with crisp ones and found:
- Eighty-sevenpercent were contaminated with bacteria that could cause an infectionin anyone with a compromised immune system, such as people with HIV orcancer.
- Seven percent had bacteria that could cause an infection in perfectly healthy people.
- Only 6% were completely clean
2. Dirty (Dirty) Money
It’s a tired spy film cliche: thesuitcase of neatly stacked bills. $200 million for an activated nuclearwarhead, all crammed into a carry-on that you’d usually fill with anemergency change of clothes and a good book.
Cash is the lubricant that facilitates all kinds of criminal activity. Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University, claims that the anonymous nature of cash (and some countries penchant for big bills) make it the go to method for illicit payment. “A million dollars in $100 notes fits into a briefcase, a million dollars in €500 notes (each worth about $565) fits into a purse.”
From ‘petty crime’, to the kind ofbone-chilling events that spark a Netflix series, cash throws its darkshadow over everyone and everything. Even Eminem in his song‘Mockingbird’ isn’t immune from the risks of cash – ‘Tryna start a piggy bank for you so you could go to college/Almost had a thousand dollars ’til someone broke in and stole it.’
There are other ways to engage withcorrupt officials, finance crime and evade taxes, but if you ditch papercurrency you’re left with high transaction costs (a suitcase of uncutdiamonds) or risk detection (credit card payments, bank wires, etc.)
Terrorism financing, racketeering,extortion, human trafficking, weapons smuggling and all forms ofcorruption – the underbelly of humanity, all greased by greasy bills.
3. Cash: The Economy Crippler
We hear it at family gatherings, dinner parties, even standing in-line at the grocery: ‘cash is king’, ‘if you can’t touch it you don’t really own it’. Human beings have spent generations trying to figure out money systems that work. We’re used to that physical transfer – handing over and receiving. It satisfies our deeper understandings of ownership and trust. I give away; I receive in return. It just makes sense.
The truth is always stranger thanfiction. The cost of producing cash is astronomical. According to twoTufts professors the cost of cash in the United States is $200 billionannually. That’s just the cost of printing it and doesn’t factor in thesmall army necessary to move and safeguard it.
This cost isn’t some abstract andnebulous number paid for by ‘the government’, it get’s deflected ontothe average consumer through high fees and higher risks. U.S. storeslose $40 billion dollars a year to cash theft and attempting to mitigatethat risk accounts for a staggering 0.46% of a business’ average gross sales.
The irony? Despite this entire song and dance, we can reproduce paper cash illegally using a basic inkjet printer.
It’s expensive to print, move and process, yet we’re tied to it.
Cash 2.0
The AMC hit television series Breaking Bad (a show that charts a highschool chemistry teacher’s descent into Meth kingpin) is an instructionmanual on all of the ways cash can end up cutting us. Money laundering,tax evasion, extortion, corruption, bribery and executions – all paidfor with dollar bills – to money’s least discussed problem, it’s edible.
Skyler White stands over a mountainof illicit drug money and explains that it’s all she can do to keep itdry and spray it for Silverfish. Silverfish are insects that eat cotton,something that the American dollar happens to be made of. If your unitof wealth can be devoured by mites, your unit of wealth is poor.
It’s obvious then that we should begin the process of replacing paper money – but what are we trading it in for?
Almost every aspect of our daily lifehas been reshaped by our interactions with technology. We don’t deliverhand mail anymore because a text message doesn’t take three weeks tocross an ocean. We have digital storerooms on our phone which we fillwith a warehouse worth of CDs.
Our money should be as digital and modern as we are.
This isn’t some distant futureaccessory like flying cars or a fixed moon settlement – it’s a knownreality for millions of people. M-Pesa, is a digital cash operator thatstarted in 2007 in Kenya. Built on the rails of Vodafone, atelecommunication company, M-Pesa allows users to send and receivedigital cash (all backed 1:1 by the country’s currency) and even paybills.
It’s a new age of smarter money and it’s something the Caribbean should definitely capitalize on.
Part 2 of this blog post takes oncash 2.0 in greater detail. We focus on the Caribbean and a solutiontailor-made for our own shores.
