Why The War On Physical Cash Is A War On Freedom

Joe Weisenthal (0:05)

Hello, Odd Lots listeners, it's Joe Weisenthal. Before we get to today's episode, I wanted to let you know that we recorded this interview with Rohan Grey back in early March. So things have obviously changed quite a bit since then, but we thought the interview was still an important one to run and actually has quite a bit to say about the role of money as it relates to government, questions of privacy, all things that are gonna be important. So we wanted to get it out, but if it doesn't sound exactly timely with the news, now you know why. Thanks for listening. Thanks for listening.

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:58)

And I'm Tracy Alloway.

Joe Weisenthal (1:00)

Tracy, how are things holding up there in Hong Kong these days?

Tracy Alloway (1:04)

I don't know what to say. Most people are still wearing face masks. Lots of people are working from home. I guess it just feels more normal nowadays.

Joe Weisenthal (1:11)

So normal-ish, like more normal than it was, say, like a month ago.

Tracy Alloway (1:17)

Yeah, but I can't figure out whether or not it's actually getting back to normal or this has just become the new normal.

Joe Weisenthal (1:26)

There are a lot of like extraordinary stories that we've been reading about things going on in China, in Asia, as people in governments deal with this virus. And one story that's probably not the most important story of all of it, but that was interesting, was the story about the government literally laundering cash.

Tracy Alloway (1:49)

Yeah, that's right.

So in order to help mitigate the spread of the coronavirus, there was a moment when the Chinese government was sanitizing its actual cash bills. And it was doing it with, I think it was with UV light, but money laundering, as you say, literally.

Joe Weisenthal (2:07)

Literal laundering of money. But by and large, although obviously cash exists and cash exists in Hong Kong, et cetera, mainland China and Hong Kong are probably among the most forward economies in terms of really becoming a post-cash society.

Tracy Alloway (2:25)

Yeah, I think that's right. I think I've told you stories before of me going to Beijing and just being almost unable to purchase stuff with cash. When you try to pay for coffee at Starbucks, for instance, with actual money, the cash register lady tends to give you this sort of look of despair and have to go to the back room and pull out a little plastic bag with change in it because no one else pays it that way.

And in the coronavirus outbreak, there's actually an argument that the digitalization of money in China was a good thing because it meant that people could still pay for stuff through apps, money could still flow through the system, and of course, people didn't have to touch all those dirty physical bills.

Joe Weisenthal (3:13)

Yeah, I mean, it feels like there's a few different angles of this. So one, as you mentioned, and as we just discussed, bills could in theory be a vehicle for transmitting the virus.

There was also an interesting story a few weeks ago, I recall, about how authorities in Hubei province where Wuhan is, the real epicenter of the virus, were able to basically track everyone who had bought cold medicine in the entire province or in the entire city. And it struck me that that is one of those things you can only do if you have a very highly centralized database of essentially every transaction there is, every purchase and be able to tie that to some individual.

Tracy Alloway (4:01)

Yeah, a digital database combined with an intensely powerful surveillance system of government, sure, yeah.

Joe Weisenthal (4:10)

So regardless, we are moving and this episode is not really going to be about the virus per se, but it is emblematic of where we're all going as a society, maybe at different speeds, which is that physical cash is on the way out. And certainly with so much commerce going digital, where there is no such thing as cash in the digital realm, for the most part, excluding sort of independent cryptocurrencies, cash is kind of a dying thing.

Tracy Alloway (4:43)

I think that's definitely an open question. And I think there is, as you say, this move to electronic transactions. Definitely China is at the vanguard of this, and it does open up the question of what's the role of cash in that kind of society in the future?

Is it going to be like the Starbucks in Beijing where people have to go to a back room to sort of search for coins to give you change because no one else is using it?