Government and Payments Technology

Your earnest contributor Spartacus has been contemplating and cogitating over the holidays, and he (or she?) is concerned. Very concerned. Concerned about how our beloved parliamentary and bureaucratic overlords will utilize technological evolution to further track and control the citizenry.

Consider for a moment the growth of crypto-currency and the coming deployment of driver-less cars.

In the case of crypto-currency, as can be seen already, there are calls from government and regulatory agencies for cyropo-currencies to be regulated so to “protect” investors. But who is really in need of the protection? Is it the investors or is it the state? Does an alternative means of exchange, a means in competition to state sponsored fiat currency really pose a threat?

What is the Government offering? Not just oppressive controls on who and how to buy, sell or hold crypto-currencies.  What is on offer is a pathway to the elimination of cash, a pathway built upon damaging any competition to government issued currency.

Don’t believe Spartacus? Consider this.

On Australia day this year (that is 26 January and not 27 January for all the 3JJJ listeners), the New Payments Platform (NPP) will launch.  As the name suggests, the NPP is a new payments system that will replace much of the current payment plumbing of the Australian economy. It will replace Bpay, direct credit, direct debit and some other such payments.

NPP’s key consumer proposition will be real time payments. For example, Spartacus can send a payment from his (or her?) CBA account to Lucius’ ANZ account and it will be there straight away. None of this overnight or over the weekend business.

And from where comes this system? It is build, owned and governed by the Australian banks. Check the membership of the board. It was also designed and built at the instruction of the Reserve Bank of Australia.

According to the RBA, cash payments are on the decline. Presumably they are hoping that the NPP will reduce that even further. And when that happens, you get to ATO, APRA and ASIO nirvana. Even more data on even more people showing what and where is spending. But wait. There’s more, and not steak knives.

Late last year, out gone ASIC chairmain Greg Medcraft said that central banks would issue their own fiat crypto-currencies within the next 5-10 years. One might imagine that Mr Medcraft was not average Joe, but rather an informed commentator, and he said:

With central-bank issued digital currencies, you might not need a bank account anymore

Hey. You won’t need cash either and probably won’t be allowed cash.

And why does government want to eliminate cash? Mostly it is about tracking citizens; initially for tax compliance reasons, but beyond that, let your imagination run wild. But it is also about enforcing negative interest rates – the absolute wet dream of the Keynesian profligate.

With cash, if interest rates go negative, citizens can just withdraw their funds and hide their cash under their beds. But with crypto fiat currency, there is nowhere to hide. That $100 you had in the bank is now $98.  The difference was to fund the government’s latest investment scheme, the NSN (National Stadium Network), a scheme to demolish all current sporting stadia around Australia and build the education revolution with new school halls connected with fiber to the playing field hosting Gonski 5.0 classes where social justice will be taught.

No cash – no privacy – no freedom.  Game over.

Spartacus will post part 2 of this rant (Government and self driving cars)  in the next couple of days.

Follow I Am Spartacus on Twitter at @Ey_am_Spartacus

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36 Responses to Government and Payments Technology

  1. Helen

    Well that will be the end of the cash economy. We will have to go back to paying in cartons!

  2. Bruce of Newcastle

    Going over to bank cryptocurrencies makes me suspect that interest on deposits will be a thing of the past. It seems to be going that way already.

    That will be fun when inflation rises. We’ll have to use it or lose it. No doubt the Keynesians in the RBA like that idea.

  3. Pete of Perth

    I used to do carton jobs at my first place of employment. Assaying scrap metal from a metal recycler. Quality of beer directly proportional to the number of elements requested. Friday drinks were in good supply.

  4. DM of WA

    Don’t worry, there will always be gold!

  5. flyingduk

    so…for the xth time…. buy crytpos!

  6. We will have to go back to paying in cartons!

    Like the rum rebellion.

  7. Eyrie

    Gold aka Air America jewellery.

  8. Eyrie

    Oh FFS : gold aka Air America bracelets

  9. Botswana O'Hooligan

    Google “Shin Plasters” for they were issued back in the twenties by many firms and either called shin plasters in FNQ or Calabashes down south, so this latest fad is nothing new and will pass.

  10. Squirrel

    Interestingly (but not at all surprisingly), this whizzo new technology will not be utilised to – for instance – move away from the antiquated model of a large, highly centralised public sector bureaucracy. A government interested in being nimble and agile…..might be looking closely at that, but this current government, and any likely to succeed and replace it, will only be interested in further control and manipulation of the public.

    Along with so much of the other idiocy and corruption which is now part of life in Straya, the long overdue humdinger of a recession which is surely heading our way might cause at least some of the punterariat to question whether getting rid of cash is such a good idea.

  11. EvilElvis

    Does this mean the whizz bang blockchain ledger frogshit will ultimately end up blockchained to the bottom of the government harbour?…

  12. Michel Lasouris

    You know it makes sense……doesn’t it?

  13. Michel Lasouris

    Actually, before it gets too far, we, the intelligentsia of Catallaxy should start planning and implementing the “altrernativa fur Australia”

  14. Speedbox

    And why does government want to eliminate cash? Mostly it is about tracking citizens; initially for tax compliance reasons, but beyond that, let your imagination run wild.

    Easily the most sinister aspect of the whole thing. Govt will be able to track your every financial move – every payment received and every payment made. Naturally, it will be dressed up as “protecting us from terrorists’ , “stopping the black economy” but this is just the smokescreen.

    I have no doubt that a Govt issued crypto coin is on the horizon. The evolution of money (as a store of wealth and means of trade) dictates that paper money will be replaced – but you can forget any idea that your income and payment history will be confidential. The data sorting and collation process will pigeon-hole you for further examination. Think that the authorities will need a court issued warrant or similar? Hah, good luck with that.

    Sadly, most of the sheeple will not think through the implications of this intrusion into their private finances.

  15. The BigBlueCat

    I wonder if this will eventually take over from APCA BECS processing, or really only supplements the direct credit end of the spectrum. Certainly this should mean the elimination of cheques and cheque clearing, but equally there’s no indication of replacing direct debit or credit card transactions – NPP seems to be only for initiating an immediate cash payment based on a PayID of the recipient (ie. bank account to bank account).

    Certainly instant electronic payments has been missing from APCA for many a year now, especially given the capabilities of technology. Direct debits and credits required a settlement period inflicted by a process that recognises that funds might not be available or the bank account details could be wrong, or that the banks aren’t trading that day. I sincerely doubt this has anything to do with crypto-currencies unless the NPP platform can integrate it – and why should it since the volumes aren’t (currently) there to make it viable.

    At the end of the day, NPP ought to be just a clearinghouse for instant payments – nothing more and nothing less. The big concern should be “who’s paying for the service”? The taxpayer, or the users? The payer or the recipient (or both)?

    For B2B transactions, there are much safer methods using virtual credit cards which allow for a refund should goods not be supplied by the supplier. The travel industry has been latching on this over the last few years via an Australian company, eNett. As long as the free market exists, there ought to be alternatives to any centrally-governed initiative to offer better and safer methods, especially for B2B payments.

  16. The BigBlueCat

    Speedbox
    #2599923, posted on January 3, 2018 at 5:45 pm
    And why does government want to eliminate cash? Mostly it is about tracking citizens; initially for tax compliance reasons, but beyond that, let your imagination run wild.

    Easily the most sinister aspect of the whole thing. Govt will be able to track your every financial move – every payment received and every payment made. Naturally, it will be dressed up as “protecting us from terrorists’ , “stopping the black economy” but this is just the smokescreen.

    They’re doing it now (mostly) via AUSTRAC. NPP doesn’t add anything to this.

  17. closeapproximation

    Govt-created crypto seems somewhat pointless from a citizen’s perspective. As Sparty points out, plenty of reasons why govt might like it.

  18. 2dogs

    makes me suspect that interest on deposits will be a thing of the past.

    It is banks and deposits that will be the things of the past, not the interest. Cryptosecurities will turn result in you having an e-wallet of peer-to-peer lent funds. Banks are unnecessary middlemen, and will be eliminated.

  19. Techo

    One CIO from a Department likely affected by NPP has just resigned. Let’s see how that launch goes before we worry about anyone thinking a much more complex block chain system is still a good idea.

  20. miltonf

    I thought the whole point of crypto currency was to allow financial transactions without government snooping. I think that’s where Peter Thiel is coming from with his involvement in Bitcoin. I think that was the original aim of Paypal.

  21. The BigBlueCat

    And why does government want to eliminate cash? Mostly it is about tracking citizens; initially for tax compliance reasons, but beyond that, let your imagination run wild. But it is also about enforcing negative interest rates – the absolute wet dream of the Keynesian profligate.

    They can track us now via AUSTRAC and (if they want) the APCA. They already know about your transactions that create a tax liability (well, those in the regulated economy). If you operate under the radar in the black economy, the only way they can get an idea of your income is on what you spend – eliminate cash and replace it with a substitute like NPP and you’re able to catch those who are quite literally evading tax. People who are evading tax should be caught – they are not above the law.

    But letting my imagination run wild, perhaps a shift to crypto-currency (where there is no intrinsic value backing the currency) is a final destination because our paper / coin based currency actually has no value anyway. We’ve been off the gold-standard for years, and our coinage (for instance) has a far less value in metal terms than the value stated on the coin’s face. Try fronting up to a bank and demanding payment in gold in exchange for the face-value of your currency….. that’s what currency was originally intended for. But not anymore.

    The fact is that governments throughout the world do not have anywhere near the requisite treasury backing for all the currency they have issued. But of course they merrily print more money based on issue of bonds to banks and on other promises, but have no actual ability to meet their financial obligations on the basis of how much currency is issued. Cash and currency is but an illusion of value – much like Bitcoin. The value is in the eye of the beholder, who has been duped into thinking it has long-term standing and value from their issuer.

    The only thing we have propping up our currency is the old supply and demand model – as long as there is demand, there is value, albeit only perceived. If the printing presses at the mint stop, so does the value. So enjoy your cash while you can. Precious metals might be your only real financial salvation before the NWO get to it.

  22. John Constantine

    Make your own still and brew your own rebel currency.

    Or grow your own khat.

  23. Bruce

    About ten years ago, one of my more colourful associates posited the following:

    Gold, (in small pieces), non-perishable pharmaceuticals and medical supplies, water-purification materials, and small-arms ammo, will be the ONLY things of value when it all goes belly up.

    The greedy, megalomaniacal, sociopathic pricks, with their six and seven figure salaries (plus “bonuses” and “benefits”), want it ALL, in THEIR lifetimes, not “whenever”.

    If you have not already moved substantially in this direction, it is almost too late.

    Wildly pessimistic, paranoid, etc.?

    Never forget: You are NOT paranoid if someone really is out to get you.

  24. max

    None of this will work without electrickery.

    And computers.

    There are still some holdouts who will have nothing to do with computers and the internet.

    And isn’t it lucky we have a functioning NBN ?

  25. Howard Hill

    I guess that’s why Aussie banks are already trying to control, shut down Bitcoin.

    I know it’s the Silly Morning hemorrhoid – Australian Banks Reportedly Freeze Accounts Of Bitcoin Users

    Long Pb and Au. The Pb being contained in a brass case.

  26. Kurt

    But there’d have to be an exception to keep up the RE laundry for Chinese money in Sydney and Melbourne?

  27. Suburban Boy

    The Government might have the intention of eliminating cash from the Australian economy, but it is concealing that intention very well.

    The latest figures on banknotes in circulation show that not only are they close to a record high in nominal terms ($74 billion in circulation as at 30 June 2017) but close to a record high as a proportion of GDP (about 4.1 per cent). Circulation as a proportion of GDP has been on an upward trend for the last 50 years (from about 3.3 per cent in 1967).

    As for the description of Greg Medcraft as “an informed commentator”, if you had ever met Mr Medcraft you would not hold that view.

  28. JohnA

    max #2600001, posted on January 3, 2018, at 7:40 pm

    None of this will work without electrickery.

    And computers.

    There are still some holdouts who will have nothing to do with computers and the internet.

    And isn’t it lucky we have a functioning NBN ?

    Hah! That is the quote of the day. Here in sunny Narre South, we have enjoyed (?) a 14-hour outage from Tuesday evening to Wednesday mid-morning.

    I am beginning to think those holdouts have the right idea.

  29. Anthony Park

    A quibble.

    If you held a government backed crypto-currency how would they apply a negative interest rate to it? I’m thinking the coins would have an expiry date (perhaps unless you paid fiat currency to renew them). So, they could impose negative interest rates without actually reaching into your wallet.

    However, if negative interest rates were imposed on one currency arbitrarily, then what is to stop vendors from asking for payment in Bitcoin? Then paying their employees in Bitcoin and so forth?

  30. Os

    The Big Blue Cat, re the face value of currency, do you remember the first 50 cent coin. Almost pure, so people were melting them down and selling the silver when the value of the metal went above the value of the coin. Now that was a great way to make money.

  31. Os

    Not really “almost pure” I find, 80% silver.

  32. The BigBlueCat

    Os
    #2600515, posted on January 4, 2018 at 11:47 am
    The Big Blue Cat, re the face value of currency, do you remember the first 50 cent coin. Almost pure, so people were melting them down and selling the silver when the value of the metal went above the value of the coin. Now that was a great way to make money.

    Yes, I do remember that. I still have 1 or 2 round 50c coins here somewhere ….

  33. Chris M

    They can’t kill cash because we can just switch to using US dollars or whatever.

  34. old bloke

    Chris M
    #2600744, posted on January 4, 2018 at 3:58 pm

    They can’t kill cash because we can just switch to using US dollars or whatever.

    Bunnings vouchers.

  35. Motelier

    Watch the rise of the barter economy.

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