Israel is tightening their ban on using physical cash above certain thresholds, including between private citizens.
Under the new law, maximum payable in cash
- For business: 6,000 NIS (US$ 1,700)
Previously, cash up to the amount of 11,000 NIS ($3,200) could be used in business deals - Trading between private citizens: 15,000 NIS (US$ 4,360)
This trend will probably continue to other countries over time ( (Not checked with official document, may need to validate the information)
- Netherlands: maximum US$ 3,000 allowed
- Spain: maximum Euro 1,000 for business purpose
- Canada is already doing its own policy
- Some rich groups already have collected luxury goods for the replacement of cash that is easily liquidated.
Rationales
The argument they use in favor of it is that it makes it harder for organized crime to move value around.
The argument against it is that it reduces privacy of normal people too, and gives governments+banks more power to block transactions they don't like (even if not illegal).
Some african countries and Russia are highly possible countries to control money trasaction for any political or private purposes.
The thresholds naturally shrink over time
Due to ongoing inflation, the thresholds naturally shrink over time, too.
If you just leave the cap in place for a long enough time as currency devalues over years and decades, it effectively keeps lowering the cap on what you can use physical cash for.
For example, the US Bank Secrecy Act of 1970 made banks file gov reports on transactions/deposits over $10k (which was worth the equivalent of $80k today).
By never changing the threshold while dollars became worth 1/8th of what they used to, they broadened the scope by 8x.
If this trend keep going on all over the world, many people who do not have bank accounts may have big issue.
In short term, it may not be easy crypto currency could replace all necessary cash transaction.
But regarding high utilization of some african countries that are very lack of bank infrastructure, it may be also possible crypto may get some of its position to help people and be against dictator or some biased political parties.
Source: Lyn Alden, Jerusalem Post