The Solution To Argentina's Banking Problems Is To Go Cashless

dkatana writes: There is no way back for Argentinian people to trust their own currency. Several governments have used the "Peso/Dollar" exchange to dig into people's savings, reward their friends and limit the freedom of citizens to use other currencies.

Short of Dollarizing the economy again, the only solution for the country is going cashless. People are desperate, and they're looking for alternatives such as mobile payments, Amazon gift cards and Bitcoin to store their savings away from government control. A digital currency could help curb black market exchanges, fight corruption and restore the country's image.

Comments

Re:"Cashless" is meaningless

[PolygamousRanchKid]

You need a currency.

"1000 Quatloos for the newcomers!"

It will be interesting to see how Greece gets out of their mess, when they run out of Euros. Pundits are guessing that Greece will issue "scrips", which are a kind of government IOU, and pay government salaries and pensions with them.

The only problem with that is . . . who will want these scrips? Certainly not even the Greeks themselves. They want Euros. And they will try to get rid of their scrips as soon as they can, in exchange for something of value.

Car sales are up now in Greece by something like 40%, as people worry about if their bank accounts will get raided by the government. An automobile is considered as something "valuable". The cruel irony here, is that Greeks prefer to buy German cars . . . exactly the folks who Greeks blame for all their problems. So the Germans are actually benefiting the most from this.

Re:The IMF should be worried

[TheGavster]

Seigniorage is the difference between the cost to produce currency and the face value of the currency. Hypothetically, a cashless system would eliminate this inefficiency. There will inevitably, though, be "service fees" or somesuch taken from each transaction for administering the system.

At the end of the day, though, seigniorage is chump change compared to the power to deficit spend. What the Argentinian government really wants is to have its population to use a currency that they can make more of. If citizens are only accepting a foreign currency, or some private credits, the state has to directly collect taxes, which can be problematic politically. Forcing citizens to accept the Banana Dollar or whatever is simply the formalization of the state consuming goods and services from the population without having to answer to a set revenue policy.

Re:"Cashless" is meaningless

[Impy the Impiuos Imp]

You worthless, echo-chamber, meme-regurgitating sack of shit. India requires expats returning to pull all foreign accounts back into India at the theft-based government exchange rate. You get ripped off and the government gets your dollars.

Why do brain-dead buffoonery like you always think the opposite of pituitary gland tumor gigantism in government is solved by an anarchy? What lovely straw men you set up in your economic disasterbation fantasies!

Re:"Cashless" is meaningless

[ultranova]

Basically if you cannot hold your own money in your own hands but government holds it for you (directly or through proxy banks) you are fucked, you have nothing.

If you can't trust the local government, either because it's corrupt or because it doesn't exist, you're fucked anyway. Not only is your cash not safe from theft (or forgery - let's not forget that), but you also can't trade efficiently since there's no way to enforce deals.

If you can't trust the local government to enforce your claims of ownership, they're utterly meaningless.