Many privacy groups are fighting to preserve cash as legal tender to counter government attempts to go cashless for obvious reasons.
Yes, there is a growing movement among privacy advocates, civil liberties groups, and some political figures to ensure that cash remains a viable payment option, driven by concerns about privacy, financial inclusion, and resistance to the potential overreach of digital payment systems, including central bank digital currencies (CBDCs). This push aligns with some of the same concerns Donald Trump has expressed about CBDCs, particularly regarding government surveillance and loss of financial anonymity. Below is an overview of the movement to maintain cash as a payment option, key arguments, notable efforts, and relevant context:
1. Why Privacy Groups Advocate for Cash
Cash is unique in providing anonymous transactions, which protect individuals from surveillance by governments, corporations, or financial institutions. As digital payments (credit cards, mobile apps, and potential CBDCs) become dominant, privacy groups argue that eliminating cash could erode personal freedoms and enable tracking of every financial transaction.
- Privacy Concerns: Cash transactions do not leave a digital footprint, unlike digital payments, which can be tracked, stored, and analyzed. Privacy advocates warn that a cashless society could allow governments or companies to monitor spending habits, potentially enabling profiling, discrimination, or punishment (e.g., restricting purchases based on political views).
- Surveillance Risks: Examples like China’s social credit system, where digital payments are linked to behavioral monitoring, are cited as dystopian outcomes of cashless systems. Even in democratic societies, data from digital transactions can be accessed by law enforcement or shared with third parties.
- Financial Inclusion: Cash is critical for unbanked or underbanked populations who lack access to digital payment systems or bank accounts. In the U.S., about 5% of households (roughly 6 million) were unbanked in 2021, according to the FDIC, with higher rates among low-income and minority groups.
- Autonomy and Freedom: Cash allows individuals to transact without reliance on intermediaries (banks, payment processors), preserving economic independence. This is particularly valued by those wary of government overreach or corporate control.
2. Key Efforts to Preserve Cash
Privacy groups, advocacy organizations, and some lawmakers have taken concrete steps to ensure cash remains an accepted form of payment. Notable efforts include:
- Legislative Initiatives:
- U.S. State-Level Laws: Several states have passed or proposed laws requiring businesses to accept cash. For example:
- New York City: In 2020, NYC banned cashless businesses, mandating that retailers and restaurants accept cash to prevent discrimination against unbanked customers.
- New Jersey: A 2019 law requires most businesses to accept cash, citing both inclusion and privacy concerns.
- San Francisco and Philadelphia: Similar ordinances were passed to ensure cash access, driven by concerns about excluding low-income residents.
- Federal Proposals: While no federal law mandates cash acceptance, some lawmakers have pushed for protections. For instance, the Payment Choice Act, introduced in Congress (e.g., H.R. 4395 in 2021), aimed to require businesses to accept cash for in-person transactions, though it has not passed.
- Anti-CBDC Legislation: As noted in your previous question, bills like the No CBDC Act (supported by Trump and Senator Mike Lee) indirectly bolster cash by blocking digital currencies that could replace it. These efforts often emphasize cash as a privacy-preserving alternative.
- Advocacy Campaigns:
- Electronic Frontier Foundation (EFF): The EFF has highlighted the privacy risks of cashless systems, advocating for policies that protect cash usage. They argue that digital payments enable “mass surveillance” and that cash is a bulwark against this.
- Consumer Reports: This organization has supported efforts to maintain cash access, emphasizing its role in financial inclusion and consumer choice.
- Cash Matters: A global initiative backed by the International Currency Association, Cash Matters promotes the benefits of cash, including privacy, universal acceptance, and resilience during crises (e.g., power outages or cyberattack disruptions to digital systems).
- American Civil Liberties Union (ACLU): The ACLU has raised concerns about cashless systems exacerbating inequality and enabling surveillance, supporting policies to ensure cash remains viable.
- International Efforts:
- Sweden: Despite being a leader in digital payments, Sweden has seen pushback against cashless trends. In 2020, its central bank (Riksbank) mandated that major banks provide cash access, and laws now require certain retailers to accept cash, driven by concerns about elderly and rural populations.
- European Union: The EU’s 2023 Digital Euro proposal includes commitments to maintain cash as legal tender, responding to privacy advocates who fear a digital currency could marginalize cash.
- United Kingdom: Campaigns like “Keep Cash Alive” and statements from the Bank of England emphasize cash’s role, with laws ensuring cash access for vulnerable populations.
3. Arguments Against Cashless Trends
Privacy groups highlight several risks associated with the decline of cash, which fuel their advocacy:
- Discrimination and Exclusion: Cashless businesses can exclude those without bank accounts or digital payment methods, disproportionately affecting low-income, elderly, or immigrant communities. For example, a 2019 study by the Urban Institute found that cashless policies in Washington, D.C., limited access to goods and services for unbanked residents.
- Surveillance and Data Exploitation: Digital payments generate data that can be used for commercial purposes (e.g., targeted advertising) or government monitoring. Privacy groups cite cases like Venmo’s public transaction logs or data breaches as evidence of risks.
- Dependency on Technology: Cashless systems rely on electricity, internet, and functioning devices, making them vulnerable to outages, cyberattacks, or natural disasters. Cash remains a reliable fallback.
- Potential for Control: In extreme scenarios, governments or corporations could restrict access to digital accounts (e.g., freezing funds for political dissent), whereas cash avoids this risk. Historical examples, like Canada’s 2022 freezing of trucker convoy accounts, are often cited.
- Cultural and Psychological Value: Cash provides a tangible sense of control over spending, which some consumers prefer, and is deeply embedded in social practices (e.g., tipping, small transactions).
4. Challenges to Maintaining Cash
Despite advocacy, the use of cash is declining globally due to convenience, cost, and technological trends:
- Rise of Digital Payments: In the U.S., cash accounted for only 16% of retail transactions in 2022, down from 26% in 2017, according to the Federal Reserve. Mobile apps (e.g., Apple Pay, Venmo) and contactless cards are accelerating this trend.
- Business Preferences: Many retailers prefer digital payments for lower handling costs, faster transactions, and reduced theft risk. Some businesses, especially in urban areas, have gone cashless, prompting backlash and the aforementioned laws.
- CBDC Development: While Trump and others oppose CBDCs, other countries are advancing them, potentially reducing cash’s role. Even in the U.S., Federal Reserve research like Project Hamilton explores digital currency frameworks, raising fears that cash could be sidelined.
- Cost of Cash Infrastructure: Maintaining ATMs, cash logistics, and minting currency is expensive. For example, the U.S. Mint’s cost to produce pennies and nickels often exceeds their face value, prompting debates about phasing out low-denomination coins.
5. Connection to Trump’s CBDC Stance
Trump’s opposition to CBDCs, as outlined in the previous response, dovetails with the pro-cash movement. His January 2025 executive order banning CBDCs and promoting stablecoins explicitly aims to protect financial privacy and limit government control, echoing privacy groups’ concerns. By framing CBDCs as a tool for surveillance, Trump aligns with advocates who see cash as a critical defense against digital overreach. The No CBDC Act, supported by his allies, further reinforces this by emphasizing cash’s role as a decentralized, private payment method.
However, Trump’s focus on cryptocurrencies and stablecoins introduces complexity. While he supports private digital assets, some privacy advocates warn that stablecoins, if poorly regulated, could also enable tracking or corporate control, potentially undermining the anonymity cash provides. The tension between promoting crypto and preserving cash remains a point of debate.
6. Global Context and Trends
The pro-cash movement is not unique to the U.S. but varies by region:
- China: Heavy reliance on digital payments (e.g., WeChat, Alipay) has reduced cash usage, but the People’s Bank of China has mandated that businesses accept cash to prevent exclusion.
- India: Post-2016 demonetization, digital payments surged, but cash remains dominant in rural areas, and privacy concerns have fueled advocacy for its preservation.
- Africa: Mobile money platforms like M-Pesa dominate in countries like Kenya, but cash persists for small transactions, and inclusion concerns drive pro-cash policies.
Globally, the World Bank and IMF have emphasized the need to maintain cash access for financial inclusion, even as they support digital payment innovation.
7. Critical Considerations
While the pro-cash movement has strong arguments, critics note challenges:
- Convenience Trade-Off: Digital payments are often faster and more convenient, and younger generations increasingly prefer them, making cash advocacy an uphill battle.
- Privacy in Digital Systems: Some argue that privacy can be preserved in digital payments through encryption or decentralized systems, reducing the need to rely solely on cash.
- Crime Concerns: Opponents of cash argue it facilitates illegal activities (e.g., money laundering, tax evasion), though privacy groups counter that digital systems are also exploited (e.g., crypto scams, ransomware).
Conclusion
The movement to maintain cash as a payment option is driven by privacy groups, civil liberties organizations, and some policymakers who see it as essential for protecting anonymity, ensuring financial inclusion, and preserving economic autonomy. Efforts include state-level laws, proposed federal legislation, and advocacy campaigns by groups like the EFF and Cash Matters. These align with Trump’s anti-CBDC stance, which emphasizes privacy and government overreach concerns. However, the decline of cash usage, driven by digital payment trends and business preferences, poses challenges. Globally, similar movements underscore cash’s role, but the balance between cash and digital innovation remains contentious.
If you’d like more details on specific campaigns, data on cash usage, or the technical privacy risks of digital payments, let me know!
