First India. Now Australia is considering removing some banknotes from circulation. These are opening salvos toward a move to remove physical currency from circulation. Speculation abounds as to why this is the case. One of the major reasons is taxes.
If every transaction must pass through a network, then it can be calculated where it took place and the amount. The taxing authorities then would be able to automatically deduct them even if the transactions were held at a private location.
Gold and silver have long filled a role as money. In a cashless society, would the price of gold and silver rise or fall? It is too early to tell, however if history has proven anything, it is that people are innovative. If they feel the need to be able to conduct transactions outside of any closed system, they will find a means to do it.
For them, it’s not about avoiding taxes. It’s about the principle of maintaining privacy. It would be wise for our future monetary authorities to insure transaction privacy (blockchain technology anyone?). Gold and silver may then have a role as a means to stabilize a future monetary system.
The Global Move Toward a Cashless Society