Is Switzerland About to Become First Country to Outlaw a Cashless Society?

As in neighboring Germany and Austria, cash is still king in Switzerland albeit a much diminished one. But the Swiss will soon have the chance to vote on whether to preserve notes and coins indefinitely.  

This is a rare positive news story that, perhaps unsurprisingly, has received next to no attention beyond Swiss borders. As far as I can tell, none of the legacy media in the US, UK, France, Germany or Spain have even bothered to cover the story. Indeed, it only registered on my radar a couple of days ago, over a week after the story initially broke, because an acquaintance of mine with family in Switzerland told me about it.

So, here’s the basic thrust of the story: At the beginning of last week, a Swiss pressure group with libertarian leanings called the Swiss Freedom Movement (FBS) announced it had collected enough signatures (111,000) to trigger a national vote on preserving cash for posterity. If passed, the initiative would require the federal government to ensure that coins and banknotes are always available in sufficient quantities. What’s more, any attempt to replace the Swiss Franc with another currency — quite possibly a reference to a central bank digital currency — would also have to be put to popular vote.

From Reuters:

Swiss citizens will get the chance to try to ensure their economy never becomes cashless, a pressure group said, after collecting enough signatures on Monday to trigger a popular vote on the issue.

The Free Switzerland Movement (FBS) says cash is playing a shrinking role in many economies, as electronic payments become the default for transactions in increasingly digitised societies, making it easier for the state to monitor its citizens’ actions.

It wants a clause added to Switzerland’s currency law, which governs how the central bank and government manage the money supply, stipulating that a “sufficient quantity” of banknotes or coins must always remain in circulation…

Under Switzerland’s system of direct democracy, the proposal would become law if approved by voters, though government and parliament would decide how that law was implemented.

FBS says cash is playing a diminishing role in many economies, including Switzerland, as digital payment methods come to the fore, making it easier for the State and central bank to track citizens’ behavior.

“It is clear that… getting rid of cash not only touches on issues of transparency, simplicity or security… but also carries a huge danger of totalitarian surveillance,” FBS president Richard Koller said on the group’s website.

Cash Still King in Switzerland, Albeit a Much Diminished One

As in neighboring Germany and Austria, cash is still king in Switzerland, though its role has shrunk significantly in recent years. According to the findings of the Swiss National Bank’s last survey of people’s spending habits, conducted in the autumn of 2020, 97% of Swiss citizens still keep cash in their wallets or at home to cover day-to-day expenses, which is significantly higher than most countries.

Forty percent of transactions were still being made using cash, which is also higher than many of Switzerland’s more cashless European neighbors, such as the UK (around 15%), Sweden (less than 10%) and Norway (3-4%, the lowest level of cash usage in the world). But that was down from around 70% three years earlier. What’s more, in terms of transaction value, the debit card recently overtook cash as the payment method with the highest share for non-recurring payments.

“The survey results show that, in terms of the number of payments made, cash continues to be the payment instrument most frequently used by the Swiss population,” Fritz Zurbrugge, then-vice-president of the Swiss National Bank’s governing board, said. “Compared with 2017, however, when the first payment methods survey was carried out, its usage share has dropped significantly. The coronavirus pandemic has given additional impetus to this shift from cash to non-cash payment methods”.

As readers are well aware, the pandemic rapidly intensified preexisting forces, mainly due to unfounded fears that cash could exacerbate the spread of COVID. Those fears were stoked and magnified by mainstream media and seized upon by certain retailers (such as the British supermarket Tesco) to justify encouraging all customers to avoid making cash payments. Even today, with most public health measures (at least of the non-pharmaceutical variety) consigned to the back burner, retailers in some countries continue to reject cash.

Three Unique Benefits of Cash, According to SNB

The date for the referendum on the cash initiative is yet to be set. A video report on the issue by Swiss Info emphasized that none of Switzerland’s main political parties support the initiative. It also underscored the FSB’s libertarian credentials while likening the cash initiative to the failed sovereign money initiative of June 2018, also known as Vollgeld, which sought to put an end to fractional reserve banking by including the creation of scriptural money in the legal mandate of the Swiss National Bank (SNB).

The SNB opposed that referendum. It is not yet clear what it makes of the cash initiative. Officially speaking, the central bank has no preference as to whether people pay with cash or digital alternatives. Freedom of choice is what matters. In a speech last November titled “Popular, But Under Pressure – Cash in the Digital Age”, Martin Schlegel, vice chairman of the SNB’s governing board, highlighted three key advantages cash has over digital payments:

First, cash makes managing your money clear and simple. It is easier to keep a firm grasp on
your spending with notes and coins. You only have to open your wallet to see if you can
afford additional expenses. It is with good reason that parents usually give children their
pocket money in cash. By contrast, when you hold a plastic card up to a payment terminal, all
you see is an amount that will be debited from your account at some point in the future.

Second, thanks to its simplicity of use, cash allows everyone to participate in the economy
and in social life. You do not need an account or a mobile phone to pay with coins and
banknotes, nor do you need an affinity with digital technology.

Third, when paying by cash, you do not need to provide personal details such as your name or
card number. With electronic payments, however, information about the persons making the
payment and their payment behaviour is stored.

To ensure that people can continue to enjoy these benefits, Schlegel said the SNB must help preserve Switzerland’s cash infrastructure, which includes cash processing operators and commercial banks. It also means ensuring that shops continue to accept notes and coins for purchases.

But before we get ahead of ourselves, in Switzerland the outcome of a referendum does not automatically become law. As NC reader Irrational has kindly pointed out, there there are plenty of instances where the Swiss government, parliament, courts and official agencies have delayed and/or watered down undesirable legislation approved by the public.

Norway’s “Cash Crisis”

In some countries that are further along the road to a fully cashless existence, central banks and governments are already taking steps to preserve cash services. They include Norway. In a 2021 survey, the country’s central bank, Norges Bank, found that many of the country’s commercial banks were no longer accepting responsibility for providing cash services. This became a major exacerbating factor in Norway’s so-called “cash crisis” of May 2022, when card terminals across the nation went down for hours, leaving millions of people unable to transact.

That crisis underscored the ongoing importance of cash, which Schlegel describes as “particularly

You can still pay with banknotes even when a card terminal has stopped
working, when your mobile phone has no reception or when there is no electricity. Cash
therefore serves as an important back-up in the event of local – or even widespread –
interruptions to card or app payments.

Norway’s “cash crisis” appears to have galvanized both the government and Norges Bank to shore up cash services and the right to pay with banknotes and coins. In September 2022, the Ministry of Justice and Emergency Preparedness submitted a proposal for changes to the Act to strengthen the right to pay cash, with physical businesses being required to accept it and provisions in place to consider individual cases for other services.

But at the same time, most central banks, including Norges Bank and the SNB, are also exploring the possibility of launching their own central bank digital currencies, or CBDCs, in the not-too-distant future. While most central banks have repeatedly said that CBDCs, once launched, will co-exist alongside cash, there are no guarantees that that is what will happen, or under what sort of conditions.

In 2019, a blog post on the IMF’s website, titled “Cashing In: How to Make Negative Interest Rates Work,” based on an IMF staff study, posited setting a dual currency system in which cash would gradually depreciate against e-money, thus allowing the central bank to set “as negative an interest as necessary for countering a recession, without triggering any large-scale substitutions into cash.”

As the authors of the post themselves note, implementing such a system “would require important modifications of the financial and legal system” in each country. “In particular,” they go on, “fundamental questions pertaining to monetary law would have to be addressed and consistency with the IMF’s legal framework would need to be ensured. Also, it would require an enormous communication effort.”

The reason for that is that most people in most countries, if properly consulted, would presumably opt not to live in an economy where interest rates were significantly below zero and cash was, by design and law, constantly depreciating in value, even more so than it is today. They would probably also prefer not to live in a CBDC-based economy, where largely unaccountable central banks would have unprecedented surveillance and control powers over the population.

This is the problem: the public, whether in Nigeria, the UK, the US, Russia, Brazil or the Euro Area, are not being consulted. And this is why what is happening in Switzerland is potentially so important. At the very least there will be a public debate on the issue.

As FBS president Richard Koller notes, pushing through such guarantees for access to cash in the European Union would entail the “almost impossible” process of securing approval from all 27 member states. It would also imply a degree of public consultation, representation and accountability that simply does not exist at the EU-level.

If FBS’ referendum on preserving cash were to actually pass and the government were to actually enact the legislation without watering it down too much (two big “IFs”), Switzerland could become a potential “European standard-bearer for the defence of cash,” says Koller. And that, in this humble blogger’s opinion, would be a good thing.



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  1. John Makowiec

    For me I rarely pay cash for something. The reason is my credit cards give me cash back.Why would I pay cash when using a charge card makes purchases cheaper. All of my utility bills are automatically paid via my savings or checking accounts.I probably only spend on average about $25 in cash purchases in a week.If a merchant would give me a discount for paying with cash I would. Presently few merchants do this.

    1. Yves Smith

      I value my privacy highly. I will never use a credit card for a taxi because I do not want a record of the trip. Only very recently have I had to break down and get a smartphone, which because reasons is not fully traceable to me. Even when I do carry it, all location services are turned off and the cell is usually turned off save when I am making calls. I hope soon to have a 4G rotary dumbphone which does not have GPS.

      You are also doing your various helpers a great disservice by not tipping in cash. You are stiffing all your underpaid delivery people. And in a restaurant, if you put the tip on the bill, there’s no assurance your waitperson will get anything remotely like what you intended.

      When I moved in 2019, I was ordered by the moving service to tip the crew in cash and given guidelines. This was a big reputable company that did art moves, not fly by night locals who rented a truck.

        1. Carla

          I’m with Yves, also. My primary reason for using cash is privacy (a concept I find many people–too many people–can’t even comprehend).

          1. Victor Moses

            Honestly – for all intents and purposes privacy is dead. The government has an ongoing record of you from the day you are born. All of your most intimate health details are stored on computers accessible by any number of people from health professionals to insurance to government officials. The government knows every penny you make etc. All that paying in cash is doing is making a highly symbolic but completely ineffectual stand as far as the trend line goes.

            I also think the argument in the article misidentifies the real issue. Technology is a tool. What we want is ethical and moral people who are fully accountable in control of this tool not greedy corporations and power hungry amoral bureaucrats.

            1. Yves Smith

              That is not correct. You can prevent being GPS located except for trivially, by how you use mobile phones. My insurer does not have nor do they have the right to my health records (test results, MD notes) because I paid for them and submitted for reimbursement. They can see procedure and diagnosis codes but not more granular info, as they could with someone in an HMO. They do not know every penny I make although I do report honestly (a large chunk of my income is not subject to 1099s). Etc.

              The objective is to be a porcupine: to have enough missing or incomplete (and better yet not obvious) that you are hard to eat infomationally and don’t have a lot of nutritional value.

        1. Bsn

          Never had a cell phone and not real tempted to get one ….. but, with this phone “kit” and it’s use of a Sim card – aren’t sim cards “trackable”?
          My hubby and I were both school teachers. When they demolished the old school, we kept one bell. It’s wired to our land line and when we’re in the garden, outside, if someone calls, the school bell rings. S’ cool.

          1. lyman alpha blob

            Pretty sure any cell phone is trackable, since it needs to talk to a tower to function. That being said, the one linked to above can really be turned off so you aren’t trackable when not using it.

            I’ve never owned any cell phone myself due to privacy concerns, but I’m very interested in getting one of those rotary ones.

            Has anyone hear bought one yet and if so, does it work well? If it’s easy enough to at least do some rudimentary texting with it, then I’m in. Hard to tell from the descriptions though how y-texting works, if at all.

            1. Bob White

              As for texting… the site says:
              “Receive basic SMS messages and send pre-typed messages and numeric strings”
              So, text-adjacent, I suppose.

              I think tracking would be limited to tower data at the phone company, but only when powered on (AFAIK). No GPS nor location data.

            2. spud farmer

              Pretty sure any cell phone is trackable, since it needs to talk to a tower to function. That being said, the one linked to above can really be turned off so you aren’t trackable when not using it.

              Yup…pretty much the only way for laypeople to get decent anonymity is by using a “burner” phone with a pre-paid SIM card that was paid for in cash. It can still be tracked of when it communicates with the cell towers but if the authorities can’t link the phone and SIM to a CC or bank account and don’t know who bought it, it’s as good as anonymous. But nothing is perfect of course and they can still monitor usage patterns and metadata and try to “out” the user’s identity that way.

              There are is also a security oriented open-source Android build available that strips all the Google code from the OS and prevents trackers and miners from accessing the phone’s data. When used only in wifi mode and with select open-source apps it apparently provides good anonymity. I only know this from hearsay but the source is very familiar with opsec and takes their privacy seriously.

              1. Yves Smith

                See my comment below. You are incorrect re location by cell phone towers. Unless there is a warrant on you so you are being followed on an active basis location by cell phone tower works ONLY when the phone is actively communicating with the tower, which per court cases is when calls are being made or you are sending/receiving data. The authorities can only harvest the call/texting use data for triangulation. They do NOT retain other usage data.

            3. Yves Smith

              No, this is a myth promoted to make users indifferent to taking up GPS location.

              Location by triangulation (cell phone towers) is so approximate that it has been repeatedly rejected by courts in drug cases.

              I found where I was overseas that my GPS could not locate me accurately enough for cabs to find me (yes, I was using one of those evil apps only because there were far too few cabs to hail them). They succeeded only about 60% of the time. The app would chime saying they’d arrived and they were not to be found.

              1. orba

                I have been involved with the regulatory and technical implementation of cellphone data retention in a western European country, and you might like to know how this works here:
                Police have access to a web-based system where every cell phone that is turned on can be located to the specific sector of the specific cell tower it has contact to, in real time. This system is mandatory for every cell phone provider, and is at no cost to police. It works independent of phone activity, based on phone-tower synchronization events, and works when mobile data is turned off, even when the phone is reduced to 2G communication. The accuracy is not great, the sectors are between 30 and 90 degrees wide, and the range is between a few 100 meters (cities) and a few kilometers (country), but the sectors are immediately displayed on a map. No warrant is needed, any authorized police (by no means all of them, but hundreds) can repeatedly click on the “locate” button to a given cell phone number the whole day long, and get a pretty good idea where that phone is moving about. Most EU countries have a mandatory personal identification for every SIM card, so no anonymity, police will know who the phone is registered to, also no warrant needed.
                Investigators seem satisfied with that data, and have not requested further functionality for a long while now. Drug cases are by far the majority of of cases where additional data is sought, almost always call records. Data retention for call records is a few months, and any such request needs prosecutor approval, and costs money paid by the police to the provider, money being the prime reason to curb the number of requests. Together with other investigation information, this data is almost always sufficient for a trial, at least in “normal” investigations. Seldom is GPS data sought after, Google/Apple requests are mostly considered to be too much bureaucratic effort.
                Sometimes real time triangulation (court approval needed) using silent sms is requested, usually for high profile cases, kidnapping, extortion, but those are few.

                So, while i agree that technically tower-only location information isn’t all that great, it is enough to build a case in most cases.

                1. Yves Smith

                  Thanks for letting us know of real-time comprehensive surveillance in the EU. As I said, that data has been found by judges in the US not to be accurate enough to use at trial. It has been successfully challenged more than once and a reasonably diligent attorney could rely on those precedents.

                  However, I note you point out the phone must be turned on. You don’t even need a Faraday bag to undermine this surveillance.

                  Mine is normally off (actually normally fully discharged like now) and even the few times I am out, it is often off (as in I am carrying it because I expect to receive or need to make a particular call and turn it off after that). I really want to force all calls to my desktop VOIP phone and not have them come to my cell.

                  For the determined, there may be other ways to mess with usability of the data. For the affluent, give it to your dogwalker or nanny to carry for a while. Bad guys could swap phones registered to them with other underground types, with some way for making sure the owner does not know the recipient, better yet on the proviso it gets on swapped in a week or two to really muddy the trail. I am presuming the EU has not yet criminalized continuing to pay for a phone that was “lost” for say a month or two after the disappearance. Of course, journalists and whistleblowers could be among these bad guys.

                  1. PlutoniumKun

                    The legality of retaining such data is quite ambiguous in Europe. In a recent CJEU case taken by a convicted Irish murderer, it was ruled that such data cannot be held indiscriminately – but the ruling was ambiguous enough that national courts seem to be using a lot of leeway – in recent Irish cases the courts have to some degree ignored that ruling, but the implication are still working their way through the system.

                    On a more lighthearted note, in the amusing Wagatha Christie case the UK courts took a dim view of claims that dropping a phone into the North Sea was a valid reason for not making WA messages available to the courts.

                  2. orba

                    You do realize that your VOIP phone is easier to locate than your cell, and much more precise ?
                    And while it’s pretty easy here for police to get current location data in an investigation, I do not want to leave the impression that this is done on any massive scale, as this needs to be done manually, by people. I cannot recall a trial where the whereabouts of the cell of an accused played an important role.
                    Bad guys here simply pay others to give them their registered sim cards, but that makes little difference for investigations, as de-anonymization is pretty easy with call records. Cell holders identity is hardly ever the problem, the problem is proving a crime has been committed, and since the majority of cases are low to mid level drug crimes, it’s more about the economic efficiency of investigator manpower.
                    Dragnet-type investigations regarding location, calls, internet usage etc are quite rare. From an EU perspective, it is the US that is a surveillance society, usually not considered less so than China.

                    1. Yves Smith

                      Huh? Vonage, my VOIP provider, keeps asking me to tell them where my modem is for 911 purposes. They have my old info (from NYC) and I have not updated that, and they have that as my location.

      1. CitizenSissy

        Amen x 2. always tip servers in cash; too many cautionary tales about restaurants closing and stiffing servers their tips.

        There’s also the security issue: From October NC – Cashless transaction security is not entirely foolproof.

        Reminded of the 1989 Loma Prieta earthquake – even then people were left high and dry without electricity and a crippled banking system. I’ve always kept a extra cash around for events like that.

        1. anonymous

          I was there. An hour after the quake neighborhood stores only allowed one customer at a time, bread was $20 a loaf, water was what you were willing to pay. We drove across town to the Mission district and spent hours in a vehicle line at a Safeway to get staples like water. Cash was definitely king for a couple of weeks, and today, with all the black swan surprises between engineered storms and gas shortages/hikes I keep a stocked pantry and enough cash to live on for at least a month. God help us!

    2. lyman alpha blob

      The reason you get this “cash back” is because credit card fees take a bite out of merchants’ earnings, which they compensate for by charging higher prices. So you are paying more than you would if credit cards didn’t exist. There is no such thing as a free lunch, even if your credit card “rewards” make it seem like there is.

      It really chaps my posterior that if my company issues a $10K invoice and someone pays it by credit card, we’re sending about $250 of that right back to the issuing bank/credit card processor, and that’s on top of the processing fees they charge, all for shifting some electrons around for a few milliseconds, with minimal risk involved to the credit card issuer since they aren’t exactly lending out money from their own wallet.

      I’ve had plenty of merchants give me a discount when they see me pull out cash. Sales tax often disappears as well.

    3. ArvidMartensen

      The phasing out of cash has two issues
      1. All of your transactions are now trackable. If a future government wanted to tax a transaction or a product retrospectively to gee up the coffers, it could do so very easily. If a government wanted to know your movements in fine detail, then easy peasy. This sort of surveillance will not work well for ordinary people.
      2. Negative interest rates. Say you have $50,000 that you want to protect from the next bout of deflation. If you take your cash out of the bank and keep it safe, then you still have $50,000 in a years time, in 2 years time.
      If your digital $50,000 had to be held digitally in an account somewhere, then banks could arbitrarily (as they do) set the interest rate at say -5%, and in a years time your $50,000 would be worth $47,500. Your savings would slowly leak away. Digital savings are not safe from this sort of state and business tampering.

    4. Vermont Farm Wife

      I have no credit card, I use cash for everything. I do have a small account at a local credit union and withdraw all money shortly after it’s deposited. We’ve got a joint checking account at a bank for paying basic bills, but most of the time I use postal money orders for (very) occasional mail orders. It is possible to shop on Amazon without a credit card; buy a gift card with cash and apply it to your Amazon account, which I do when I need something I can’t get locally. I’ve come across a couple of companies that don’t accept cash or checks, only credit/debit payments, so I just don’t shop there.

      As for discounts, it’s really common around these parts for gas to be 10¢/gallon cheaper for cash, and quite a few secondhand stores (which I frequent) don’t add sales tax when I pay in cash.

      As for the cell phone, I have a TracFone in the car for emergencies, it stays in one of those electronic evidence bags which (supposedly) provides privacy and security. There’s no cell service anywhere near our farm – we’d have to drive about 10 miles to the next village over in order to use a cell phone anyway – so mobile phones really aren’t a part of our daily lives. By golly, we live almost like it’s still 1995. ;)

      1. Anonymous

        Great advice! Especially the Amazon gift card and cash for gas. I’m moving further into the country in a US region that’s fairly old school despite the digital/social media culture. I no longer watch cable TV, but still need the internet for PT work, though soon retiring. Question, you’re on this site so you use the internet, at home or the local library? How about emergencies, a land line? And what about SSA and medical care – pay as you go, call for the results? Trying to be less visible so appreciate hearing what other boomers are figuring out :)

  2. Wukchumni

    A funny thing about Swiss currency…

    About every 30 years older banknotes are demonetized and have no value after a grace period of some years to trade them in.

    This one geezer I knew, had a stash of 1,000 Franc notes he’d squirreled away in the 70’s and wasn’t hep to the changing of the guard, and got run over.

      1. Wukchumni

        Banknotes from earlier series (the first to third series inclusive, and the fifth series) have already been recalled and can no longer be exchanged at the SNB.

        This would have been the earlier 1970’s Swiss currency i’d mentioned.

        Funny story from back in the day when i’d sometimes lug forex coins back to their mother country, it was nearly impossible to pass a silver 5 Franc coin in the 1980’s in Zurich when the silver value was about half the face value, as silver coins had been demonetized and every merchant seemed to know.

        A weird thing happened in the 1980’s as Soviet commemorative Ruble coins worth about nothing worked in vending machines for 5 Francs, and when I was there one time, they’d changed the machines to only take 2 Franc coins .or smaller.

      2. Mildred Montana

        Be careful to check the collectors’ value of your silver coins. They can sometimes be worth far more than their silver content. My brother and I found an 1876 Canadian silver quarter in Dad’s possessions after he died. It apparently traded at $400.

  3. The Rev Kev

    A very interesting post this with lots to think about. So if I may approach it from a different angle, let us suppose that this referendum is successful and that the government agrees that switching to a digital currency is not a good idea. The Swiss I knew were very conservative and took the subject of money seriously so I could easily see this happening. So let’s pull back and consider the big picture. if you look at a map of EU countries you will see that there is one big splotch that is not – Switzerland. In fact ‘In 1992, the country voted “No” to joining the European Economic Area (EEA); in 2021, it unilaterally broke off negotiations on a framework agreement with the EU’

    But as we have seen, the EU is getting very aggressive in getting countries to join the union and even demanding that they follow their laws, even when those countries have not even joined yet. The EU, in fact, is using mafia tactics and I have already previously pointed out their similarity with the Borg. And they are also leaning heavily on countries to adopt the Euro. And assuming that it is only a matter of time when the Euro becomes a digital currency – you know that it is going to happen – I wonder how Switzerland will cope as a hard cash island in a sea of digital currency. Of course this also depends on stable the EU is in the coming years and I would accept no bets on that likelihood.

    1. Maha

      Discontentment with neoliberal mandates from the European Central Bank and Brussels has continued to grow since 2008. In the words of Varoufakis: “With one proud nation being subjected to fiscal waterboarding after the other, with one people turning against another, with Ponzi growth being replaced by seamlessly by Ponzi austerity, with no serious discussion of how to create a rational economic architecture and with some Europeans increasingly convinced they are more deserving Europeans than other, Europe’s core is weakening perilously and the bonds of authentic solidarity are breaking.” (And the Weak Suffer What They Must, 2016, p. 195). One can imagine a set of circumstances where the populace rejects an EU digital currency.

        1. digi_owl

          The basic mechanism is the same as Bismarck era Zollverein.

          Outsiders get all goods slapped with punishing import tariffs while insiders gets all kinds of subsidies and support packages. For smaller border nations that do not have a broad internal production, one basically have to join to avoid some severe trade imbalances.

          What is crazy is that supposedly the policy of the EU is set by a gathering of the member nation leaders, yet somehow it invariably ends up favoring market mechanisms and free market policies as solutions to all “ills”.

          1. Michaelmas

            digi-_owls: supposedly the policy of the EU is set by a gathering of the member nation leaders, yet somehow it invariably ends up favoring market mechanisms and free market policies as solutions to all “ills”.

            Not a mystery.

            [1] From its inception as the European Coal and Steel Community and then the EC, German neoliberals who were high-level members of von Hayek’s Mont Pelerin Society played a primary role in designing the organization that became the EU.

            Wilhelm Röpke was personal advisor to Konrad Adenauer, the Chancellor of West Germany, and his Minister of Economics in the late 1950s when the EC was coming together and then left to be president of the Mont Pelerin Society in 1961-62. Ludwig Erhard, the second Chancellor from 1963-66, had been a member of the Mont Pelerin Society since 1950.There were many others. Not incidentally, Röpke was also known for his pro-apartheid views on South Africa, publishing in 1964 South Africa: An Attempt at a Positive Appraisal which argued that apartheid was justified because the‘South African Negro’ was of ‘an utterly different race.’

            [2] Robert Mundell, the father of ‘Reaganomics’, was also chief designer of the Euro, introduced in 1999 and on record boasting about how the Euro would work to ‘discipline’ — immiserate — the European working classes.

            [3] As for the EC/EU as a vehicle for imposing ordoliberal/neoliberal ideological conformity: In von Hayek’s “The Economic Conditions of Interstate Federalism,” he explicitly calls for the free movement of capital, goods, and labour – a “single market,” in von Hayek’s own words – among a federation of nations as a means to severely restrict the economic policy space available to democratic governments against the market, and subordinate employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

            And that’s what you see in the modern day EU. Article 107 TFEU allows for state aid, for instance, only if it’s “compatible with the internal market” and doesn’t “distort competition.” Whether or not state aid meets these criteria is at the sole discretion of the European Commission – and courts in member states must enforce the commission’s decisions.

  4. Michael

    The problems with cyber money are
    1. It is incredibly costly in energy to create bitcoin type currencies with all the pathways they generate. The web now uses as much as the aviation industry and I would suggest cyber money production would be even worse than that given time.
    2. Web currencies are a boost to the dark web and hidden transactions. The Mafia and governments themselves would love this. However the governments would hate all the lost tax on their citizens. And I posit it would eventually create a criminal world. The financial world is bad enough already.
    3. It is cumbersome and pretty useless in a shop

    1. Grebo

      CBDC is not crypto. It takes (essentially) no energy to create or transact.

      It is completely tracked and controlled by the CB so useless for crime, including tax evasion.

      It is likely to be as easy to use as any credit or debit card.

  5. Cetra Ess

    I have mixed feelings about it.

    I think it’s true digital currency gives the state and banks more control over peoples lives, allows for tracking, zero privacy, whereas dollar bills and coins are less invasive. Also, it has a huge impact on the impoverished. I am never with cash that I want to give to the homeless, for example.

    However, I tend to think plastic is setting the groundwork for a future moneyless society. Money becomes more of an abstract concept, unseen, an idea in the air. The act of going into a grocery store and coming out with supplies, and without paying, is easier to transition to if a society is used to swiping, it becomes more a matter of recordkeeping, accounting. I think even in a moneyless society we’ll still need to track transactions somehow for the sole purpose of resource management at scale.

    A reason why the Soviet economy collapsed is because they didn’t have the means to properly resource manage an entire society. With digital currency that would seem to now be possible to do.

    But yes, there is also the very real danger that you are a citizen or not, have rights and liberties or not, based on your balance.

    1. flora

      Or based on your public political activity. Think ‘Canadian truckers’ whose bank accounts were frozen because they protested in Ottawa.

    2. spud

      can’t find the links, i anaylized in the 1990’s the so called collapse, i think the soviet union was on the gold standard, and was not real good at all in insurance area.

      in some sense, it was like the soviets were libertarians in nature.

  6. flora

    Good news about the Swiss FBS gathering enough signatures to hold a national vote about guaranteeing access to cash. I hope it wins. (Do they use electronic voting machines in Switzerland?)

  7. jefemt

    One of the best books I have read recently was The Ministry for The Future, by Kim Stanley Robinson.

    Global in scope, it is set largely from a hub in Switzerland, home to the UN and it’s many branches and initiatives. Anthropocene, climate catastrophe, Jackpots. Switzerland is an interesting Vortex for all sorts of reasons. Great read… cannot recommend it highly enough.

    Are we living in Interesting Times, Or What?

  8. Grumpy Engineer

    Whenever I hear about the wonders of the cashless society, I can’t help but think about the debate regarding voter ID laws. On one side, people say, “It’ll help reduce voter fraud”. And on the other side, people say, “Getting an ID is too difficult and expensive for people living on the edge.”

    And for a cashless society, the debate is similar: “It’ll help reduce fraud and make things easier for merchants.” versus “Establishing a bank account and maintaining Internet access to manage it is too difficult and expensive for people living on the edge.”

    Except here, we’re talking about people being able to navigate their daily lives, as opposed to voting once every two years. I very much oppose a cashless society for this reason. It’s too onerous for people who are already struggling to hold things together. I hope this Swiss initiative passes.

    1. Mildred Montana

      >”I very much oppose a cashless society…”

      Ditto, for many reasons. One of them being, all complex systems will, sooner or later and given enough time, break down. That is why redundancy is usually built into them. The monetary system is complex. Cash is a necessary redundancy.

      And thanks to Yves for this link. I hope the Swiss referendum succeeds.

      1. Carla

        @Mildred Montana — This is not a link. This is original Naked Capitalism content created and posted by Nick Corbishley. Thank you, Nick, Yves and the whole NC team, for providing material originated here, specifically for Naked Capitalism readers (along with excellent links and cross-postings as well). You all do a remarkable job, every day, that leaves me in awe.

  9. Irrational

    Very interesting post, thank you Nick!
    The outcome of the referendum does not automatically become law, most proposals voted on are not that specific. I am also not 100% sure that the Swiss government is obliged to legislate according to the outcome, but cannot find a suitable source. In any case, there are plenty of instances where they government has delayed, watered down etc legislation, see this article from
    More generally, I agree privacy is a concern, but I am also reluctant to become dependent on a payment system that extracts juicy fees from both parties to the transaction.

    1. Nick Corbishley Post author

      Thanks, Irrational, for that clarification. If you don’t mind, I’d like to hoist part of your comment.

  10. Pinhead

    There will always be a use for cash but its role, already much diminished everywhere, will soon be marginal for legal transactions with recipients who declare all of their income.
    Privacy is a serious issue but it can be addressed with proper laws. I am surprised that this is not yet a major political issue anywhere.
    On that point, it should be pointed out that Switzerland holds the world championship in hypocracy with no challenger anywhere in sight. Its bank secrecy laws, enacted in the 1930’s to fend of Nazi spies, today protects only criminals, tax evaders and kleptocrats. The amounts of money so concealed are staggering.
    Similarly, unique among democracies, Switzerland has a hugely expensive parallel police – contrôle de l’habitant in French, something similar in German – that spies on all foreign residents to a comical degree. A substantial proportion of postmen and postwomen and teachers are paid to spy on their non-Swiss neighbors.
    My Swiss lawyer, but not non-Swiss me, was able to see large extracts of my file when, at age 33, I was declared dead by the incompetent Geneva police who tried to have me expelled from the country, where I had lived for many years, to hide their blunder.

  11. Savita

    Following up on Yves Smith, Bob White and Lyman alpha bob comments about phones.
    Couple points. The Librem phone is an Android that has been modded for privacy, including stripped of google and other spy ware. It’s a bit more expensive but worth the investment

    Also ‘rooting’ an Android phone is a technical fix. It means achieving administration privileges. This grants much greater control over the hardware and software. For example getting rid of features, functions, apps etc that are offensive to privacy. The process is way easier than it used to be via free software like Kingo Root and similar. Some phones can be rooted others can not,one of the steps in the process requires some brand & model research to see if your phone can be rooted. But, really, all the info is available online and its not that hard.

    It is also very helpful to consider a ‘threat model’ So, yes the phone always talks to a tower. This means: Telco and thereby, Gov. have access to the data . But this is not the same as google and a list of anonymous third parties in multiple countries having access to your data. Via, GPS apps and all the other bloatware apps installed. Security/Privacy is not an on/off switch. And absolute privacy/security is impossible as long as we are plugged in. So aim for the shades of grey.

    I only advocate for lawful activity. In that context, I will add, for those this is meaningful to: having the phone not registered in ones name is another step forward. As is, not being linked to the physical phone itself – via the purchase or via the previous use of SIM cards in that phone. Because the physical phones IMEI number is transmitted along with the SIM number. They go hand in hand.

    1. Bob White

      The Librem phone looks interesting, will have to look into them further…

      We have been successful installing LineageOS on a few older Galaxy phones (S4, S5, S6), and they run great, as it is really stripped down. Will not run “Big G” apps without an additional app. Will be trying it on an S10 soon, should work.

      You can also legally get a SIM card for cash, and no ID in the USA, so that is mostly anonymous.

    2. Yves Smith

      This statement is misleading:

      So, yes the phone always talks to a tower. This means: Telco and thereby, Gov. have access to the data

      The cell phone companies ABSOLUTELY DO NOT retain the data of your phone talking to the tower. They retain data ONLY of active communication, as in calls, texting, other data use.

      So unless there is an active warrant out on you. the police and authorities can triangulate ONLY from when you were using the phone. That means gaps. And that’s before getting to the fact that locating someone from triangulation even when the phone is in use has been rejected by courts as too approximate to be valid as evidence.

      1. Hazelbrew

        Is that true of all phone companies in all jurisdiction worldwide or the ones you are familiar with?
        And is that always going to hold true?

        And how are you defining retention? Keeping track of call record is a must for billing purposes. But many devices in the wider context than telecommunications will keep local caches of data for an hour day or week say. For diagnostic purposes,. or performance analysis.
        Do I know that Telco equipment does that? No. Would I trust them ? No.

        Active data use is another warning flag. There are plenty of apps that will have a small background data usage and leave a trail

        Lastly courts and burden of proof for conviction is one thing. Approximate location is another. E.g. knowing that I have been somewhere in south London versus claiming to be in Bristol 100 miles away? Sometimes that level of approximate location is good enough.

        Savita statement that security is not an on/off switch holds true

        1. Yves Smith

          Do not straw man me. My comment was about the US.

          This is from a few years back but it indicates that the frequency of pinging is set by the carrier.

          My impression in the US is that given the disparity in accuracy between GPS (which can be used in court) and triangulation data, which can be successfully challenged as not granular enough to be used in court, that the concern about triangulation in the US is way overdone. This is a very good technical discussion:

          For instance:

          There are multiple methods of locating a cellular device. Their deployment depends on the landscape and money.

          Cell location. Easy and cheap – page the device, note in which cell it answers – but very low accuracy, a cell can cover hundreds of square km / miles. Always available.
          Cell location + timing advance. As above but also provides a rough (+/- 500m or so) estimation of distance from the tower.
          GPS – ask the device to fire its own GPS and return the coordinates. Cheap, pretty accurate in open space (a few meters), bad in forests or city landscape, unusable in many indoors scenarios. Recent proposals (Apple, Google) allow the device to use other location sources like WiFi. Pretty popular.
          Network computed GPS – ask to device to return satellite readings and compute coordinates in the network. Same precision as above but avoids the need of a warm start or A-GPS. I know of no commercial implementations.
          Device based Time Of Arrival Differentials – ask the device to measure the delay from different cells and triangulate in network. Again, no known commercial implementations since phones don’t implement it.
          Network triangulation – send arming command to specialized listening stations then page the device, measure arrival time of the device response and triangulate in network. Decent precision (tens of meters) but expensive since it needs extra hardware installed – the cellular network only triggers the identifiable device transmission. Deployed in cities of developed countries.

          Multiple location sources can be or become available for the same device. It is common for emergency calls to initially provide only the cell and later the GPS location once the device manages to get a fix.

          You need to worry about GPS. As another reader indicated, this is not at all the case in the EU, where not only is triangulation data astonishingly accepted as accurate enough to use in court as evidence (the US is not at all a pro presumed criminal society) but the police can and apparently do harvest it on a real time basis. Although it may be that in reality, this data is overwhelmingly GPS and the very few non-GPS phones are glossed over in this discussion. As Vinny famously said in My Cousin Vinny, the rules of physics don’t get suspended on a particular stovetop…or in the EU.

          On top of that, the Supreme Court also ruled in 2018 that police had to have a warrant to get that data. The carriers do retain cell tower data, with the retention times all over the map. I could not find how granular that information is.

          This discussion of that Supreme Court ruling supports what I had believed, that the location data the carriers retain is triggered by use. With smart phones pinging towers multiple times a minute, it would seem to be a gargantuan task to retain that much information from multiple towers for the purpose of triangulation when the vast majority of phones now use GPS.

          From Washington Journal of Law, Technology, and Arts:

          CSLI is the information a wireless carrier collects as a cell phone gives its location to nearby cell towers, called cell sites. Since wireless carriers need to reach individuals when they receive a call, CSLI is constantly being created whether or not the individual is using their phone. Any activity generates CSLI, including texts, emails, or applications.

          I do not have time to run down the ruling, but as indicated above, carriers ping phones with GPS to rat out their location, so the data on this defendant is likely to have been from GPS, not triangulation, particularly since the prosecution went on about how precisely and many many times they had located him.

          Again as indicated, I was touting desirability of using dumb phones in the US. An alternative is disabling GPS, which prepper type vids will show you how to do. At least in the ones I have seen, the GPS has a separate small battery of its own, so that’s what you need to remove.

  12. El Slobbo

    Speaking of gaining privacy by rooting your phone, lineageos defaults to having no Google apps and no Google Play. Rooting/installation takes about an hour but it’s quite simple if you follow the instructions carefully.

  13. Savita

    Oh and there’s a non-phone option. Using voice over IP. This means having a phone number provided by an online service. It might just go to voice mail only, or be redirected to another phone, if that’s your preference. Quite cost effective I believe. I even hear that Google Voice is free. And a VPN could also be used to dial-in to the online provider. So, options. PS amazed that its possible to buy a SIM card without ID in the states! That’s certainly not the case here in Australia, it’s never been the case.
    It seems to run counter to everything the LEO would prefer, so it’s really kind of astounding to this non-American :-)

    1. Michaelmas

      Savita: …amazed that its possible to buy a SIM card without ID in the states! That’s certainly not the case here in Australia, it’s never been the case. It seems to run counter to everything the LEO would prefer, so it’s really kind of astounding to this non-American

      You can buy a prepaid sim card with cash and without ID in the UK and much of the former empire, like most of the Caribbean I’ve ever been. So Australia is the odd man out there.

      Internationally, the situation varies from country to country —

  14. Susan the other

    I don’t know how to interpret the usefulness of going cashless. If I simply widen the scope of all the consequences of using money it’s a nightmare of permutations. And exploitation. So on the one hand a CBDC system would probably be able to ration our consumption and possibly control supply. Supply side currency? I don’t think there’s a method for controlling demand except to provide, distribute, the basic stuff of civilization. So with that in mind, before big brother attempts to control consumption, we’d better have in place not just digital currencies but digital distribution networks. Money has been a wonderful human convenience. Not so much for the environment. I mean, why are we even talking about this?

  15. Hatuxka

    Even the main 7:30 PM Swiss TV news has not covered this no-cashless initiative. They have touted the debut of a PayPal-like app instead.

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