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Does electronic cash really need to emulate the anonymity of physical cash?

I love Denmark. I feel that the ancient and historic bonds between England and Denmark are strong. Since I do not recognise the legitimacy of William the Bastard’s claim to the English throne in 1066, as far as I am concerned England remains a Scandinavian country and part of the future Northern non-European Union. And my Danish connections do not end there. As a fully paid-up member of the English middle class I am (inexplicably) hooked on Borgen. I loved The Killing. And I love what the Danes are doing with cash, which is, by and large, getting rid of it. But not quickly enough.

At the Future of Money seminar in Copenhagen in November, I remember that one of the discussions was about anonymity. I can’t remember exactly what was said, but I do remember expressing the opinion that Bitcoin’s supposed anonymity was not as much of a selling point as the enthusiasts tell each other. Which is to ask, whether electronic cash really needs to emulate the anonymity of physical cash?

I thought about this today because in his entertaining interview for the new magazine from NETS “Digital Values”, Bjorn Ulvaeus (one of the Bs in ABBA, in case you didn’t recognise the name) calls for the Scandinavian countries to take the lead and become the first cashless countries. It’s well worth a read for many reasons, and I found myself nodding in agreement and smiling all the way through. But I disagreed with Bjorn about one thing he said when discussing the anonymity of cash as a means of exchange. He says that

We’re already a surveillance society and removing what’s left of the cash from society wouldn’t make any difference

Ah yes, but I will be able to mitigate the impact of the surveillance state by dressing in my Facebook-blue burkha whenever I leave home. How will I mitigate the recording of all transactions? It’s a point that needs addressing. The impact of removing the anonymity of cash is hardly a new speculation. In 1968, Paul Armer of the RAND Corporation testified in front of a U.S. Senate subcommittee about his concerns for privacy in the future.

It seems high time to me that some organization in the executive branch of the government be charged with concern over the problem of privacy — just as the Department of Defense is charged with providing for the common defense, and as HEW is charged with the problems of health and education.

[From The Privacy Dangers of a Cashless Society Were Clear Over 40 Years Ago]

I don’t think the government has any kind of strategic view of identity and therefore a strategic view of privacy, but there are people who do (e.g., me) and I think that the problem of cash is a specific and tangible place to apply and explore them. Bjorn’s sounds like a counsel of despair! I’m not prepared to give up so easily. If we get rid of cash, we should aim to replace it with something that provides not the anonymity of cash but the privacy that is necessary in a civilised society. Will blog.


  1. So the problem with anonymity, is how do you grant it without turning people into assholes? The early days of the internet had too much of a good thing, and now it’s going too far the other way.

    It’s a leap of faith, but I think a network can take a view on if you’re trustworthy / whether you’re likely to be an AML or sanctions risk based on you’re entire history in the network… but that pre-supposes some kind of blockchain integration or Payments OS.

    Happy Pi day.

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