Despite all the reforms and economic growth that has come out of Russia since the rise to power of Vladimir Putin, there is still plenty of corruption, especially within the corporate and mafioso sectors of the country. And with the West pushing strongly towards eliminating physical cash under the guise of stopping terrorism, drug cartels, and money laundering, it appears that even Russia is not immune to this financial sea-change and are now joining onto the bandwagon to get rid of cash.
According to the newspaper, the ministries are considering banning the payment of salaries in cash, limiting large cash purchases or introducing a cash tax.
Officials want to limit cash purchases of real estate, cars, and luxury items, but the cut-off price is being discussed. The economists are also looking at examples of India and Azerbaijan that limit not only cash transactions, but also cash withdrawals.
In January, the Russian media reported the government is considering setting a single cash purchase limit at 500,000 rubles (about $8,750 at the current exchange rate). Minister of Finance Anton Siluanov backed the initiative without specifying the limit.
At the moment, Russians still prefer cash transactions. In the first nine months of 2016 holders of bank cards withdrew 19 trillion rubles ($330 billion), but only spent 8.7 trillion ($150 billion) to pay for goods and services using plastic. – Russia Today
A digital cashless financial system is not completely evil unto itself, as most people in industrialized countries already perform the majority of their transactions using plastic or digital money. However, it is the sub-conscious knowledge that they could pull out their money in physical form at anytime if they so choose that allows individuals to exert a freedom of choice that allows the system to work.
The fact of the matter is, if nations really wanted to end money laundering, drug transactions, and even the funding of terrorism they would focus more on the banks themselves rather than trying to hinder the freedoms of people who for the most function within the confines of the law. And anytime you see a government calling for the elimination of cash, it is prudent to believe that their agenda will extend far beyond that of simple crime fighting.
Kenneth Schortgen Jr is a writer for The Daily Economist, Secretsofthefed.com, Roguemoney.net, and Viral Liberty, and hosts the popular youtube podcast on Mondays, Wednesdays and Fridays. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.