This point comes when a society goes cashless and the potential for econgularity is at its highest. A singularity is defined as the point in which technological advancement will "radically change human civilization and perhaps even human nature itself." It is impossible to know if this will actually happen, but a cashless society would certainly give governments unprecedented access to information and power over citizens. Currently, we have little evidence to indicate that governments will refrain from using this power. On the contrary, the U.S. government is already using its snooping prowess and big-data manipulation in some frightening ways.



The technological command of the National Security Agency has been widely reported on and does not need repeating here. Suffice it to note, that it would be no challenge for the NSA or certain other government agencies to monitor any company or consumer transaction in real time, if it so desired.



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To provide another example, the U.S. government is becoming very fond of seizing money from citizens first and asking questions later via "civil forfeiture." Amazingly, the government is permitted by law to do this even if it is only government staff members who have a suspicion, not proof, of wrongdoing. By seizing a citizen's or a firm's money, the victim/defendant has almost no choice but to settle. A case about civil forfeiture was recently argued in front of the Supreme Court in which the government seized all the money of a tiny family-owned grocery store on the suspicion that it was laundering cash because its cash deposits were below the $10,000 level, an occurrence that triggers a report to the government. By depriving companies and individuals of the cash to defend themselves, even innocent firms are under immense pressure to settle or to plead guilty. To make matters worse, the dramatic consolidation of the banking system has made it easier for the government to acquire information as there are fewer access points. For example, JPMorgan, one of America's largest and most powerful banks, is the size of more than 3,000 smaller banks combined, and the top four U.S. banks control about 60 percent of the U.S. banking deposits.



The U.S. government has also been using less dramatic means to limit the freedom of its citizens. In recent years, it made it increasingly difficult for companies to operate or individuals to transact by adding compliance hurdles for banks wishing to deal with certain categories of clients. By making it too expensive to deal with certain clients or sending the signal that a bank should not deal with a particular client or type of client, the government can almost assuredly keep that company or person out of the banking system. Banks are so critically dependent on government regulatory approval for their actions that observers like Warren Buffett, among many others, have recognized the government's immense power over banks. Recently, even JPMorgan, announced that it would be ending relationships with whole categories of clients that pose compliance challenges.



If current government trends continue, a cashless economy could thus very well lead to an econgularity. Imagine a future in which soon, a government staff member could suspect an individual of some misconduct, or perhaps deem that person's politics or speech unacceptable. It would take just a few keystrokes to order all financial institutions to decline any withdrawal or payment from that individual and to transfer any deposits or payments of that person to the government, or at least freeze any access to funds. Perhaps this would need to be reviewed by a secret court that would approve 99.7 percent of all requests, but would provide a veneer of due process. It is fair to think that the targeted individual might starve to death. This could be insured by cutting off access to the payment system of anyone suspected of helping the targeted individual.



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While bitcoin, a private synthetic cyber currency, might seem like an antidote to this scenario, it, too, requires connectivity, which can be subject to monitoring. Further, the exchange of bitcoin to the currency of the country in question can be regulated in ways that could limit or even end its utility. Testimony by regulators to the U.S. Senate on Nov. 18th that the government can deal with bitcoin via the existing currency transaction surveillance laws and surveillance methods in place is a pretty good indication that U.S. agencies could also envelop bitcoin via meta-data and behavioral analysis.



It is by no means certain that such a dystopian outcome will occur in a cashless society. It could be that certain countries such as Sweden can make the leap without any adverse consequences. But my fear is that some governments will find it irresistible to take much greater control of the everyday behaviors of their citizens simply because they can.