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The Endgame of “Financial Inclusion” Part 3: Global Push for Cashless Society

The Funders:

A parallel effort led by the same forces pushing Biometric Identification System, hopes to abolish cash and move toward a “cashless” global society.

If you’re not sure what this means for you, the world government would know where you go, what you do, who you’re with, and who you are at all times, anywhere, every day and every night.

We know from news headlines that many countries are now actively phasing out high denomination banknotes, India, Pakistan, Australia, Venezuela and so on in order to combat money laundering and the financing of terrorism. Kenneth Rogoff, American economist and professor at Harvard, argues that more electronic payments and fewer banknotes would make the world a better place. However, they can use the same argument to scrap 20s, then 10s, and so on. I think it's clear the long-term plan is to get rid of cash entirely, that is why the UN, EU, financial organisations, private and public sectors are all pushing for digital economy called “Financial Inclusion”. The reason they want this is so that everything can be tracked and subjected to analysis. It will be tied in with the surveillance of your emails and the web pages you look at. And ultimately, with the face-recognition software to fill in the gaps of your whereabouts between transactions.

European Union

The Telegraph reported in 2016 that Mario Draghi, the president of the European Central Bank, will no longer produce €500 bank notes over fears that they were widely used by criminals. British banks and money exchange businesses stopped issuing the notes in 2010 after a report showed criminals accounted for 90% of demand.

A EU Legislative initiative titled “Proposal for an EU initiative on restrictions on payments in cash” was published by the European Union (EU) on 23 January 2017. This proposal comes after “The Commission published on 2 February 2016 a Communication to the Council and the Parliament on an Action Plan to further step up the fight against the financing of terrorism (COM (2016) 50)” in which the eradication of cash have been bolstered by evidence that high-value notes play a major role in crime, terrorism and tax evasion. Prior to that Europol commissioned “A strategic Report on the use of cash by Criminal groups as a facilitator for money laundering Report Why is Cash Still King?” in 2015.On the final page of the Proposal, under the following heading "Will an Implementation plan be established?", the outcome was "Depending on the complexity of the final proposal and the legal instrument used, an implementation plan might be established."

United Nations (UN)

The following is from the World Bank and International Monetary Fund Reference Guide to Anti-Money Laundering and Combating the Financing of Terrorism to help countries understand the new international standards. The United Nations (UN) was the first international organization to undertake significant action to fight money laundering on a truly world-wide basis. The UN is important in this regard for several reasons. First, it is the international organization with the broadest range of membership. Founded in October of 1945, there are currently 191 member states of the UN from throughout the world. Second, the UN actively operates a program to fight money laundering; the Global Programme Against Money Laundering (GPML), which is headquartered in Vienna, Austria, is part of the UN Office of Drugs and Crime (ODC). Third, and perhaps most importantly, the UN has the ability to adopt international treaties or conventions that have the effect of law in a country once that country has signed, ratified and implemented the convention, depending upon the country’s constitution and legal structure. In certain cases, the UN Security Council has the authority to bind all member countries through a Security Council Resolution, regardless of other action on the part of an individual country. There were other international efforts, e.g., “Measures Against the Transfer and Safekeeping of Funds of Criminal Origin,” adopted by the Committee of the Council of Europe on June 27, 1980.

In 2002, following lengthy consultations, the FATF (Financial Action Task Force on Money Laundering), International Monetary Fund (IMF), and World Bank adopted a single assessment methodology to be used both by FATF in its mutual evaluations and by the IMF and World Bank in their assessments under their financial sector assessment and offshore financial center programs. The FATF-style Style Regional Bodies (FSRBs), geographical sector organizations, which had been involved in the development of the methodology, subsequently agreed to use it for their mutual evaluations. According to International Monetary Fund (IMF), “The international standard for the fight against money laundering and the financing of terrorism has been established by the Financial Action Task Force (FATF), which is a 33-member organization with primary responsibility for developing a world-wide standard for anti-money laundering and combating the financing of terrorism. The FATF was established by the G-7 Summit in Paris in 1989 and works in close cooperation with other key international organizations, including the IMF, the World Bank, the United Nations, and FATF-style regional bodies".

The emergence of an international network of economic systems has been made possible by increasing interaction of people, states, or countries through the growth of the international flow of money, ideas, and culture. Globalization is primarily an economic process of integration that has social and cultural aspects. It involves goods and services, and the economic resources of capital, technology, and data. The Alliance for Financial Inclusion (AFI) Executive Director Alfred Hannig highlighted on 24 April 2013 progress in financial inclusion during the IMF-World Bank 2013 Spring Meetings: "Financial inclusion is no longer a fringe subject. It is now recognized as an important part of the mainstream thinking on economic development based on country leadership.”

G20 – or Group of Twenty

The G20 (or G-20 or Group of Twenty) is an international forum for the governments and central bank governors from 19 individual countries plus the European Union (EU) from Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States. Founded in 1999, the G20 aims to discuss policy pertaining to the promotion of international financial stability. It seeks to address issues that go beyond the responsibilities of any one organization. The G20 heads of government or heads of state have periodically conferred at summits since their initial meeting in 2008 (Financial Crash), and the group also hosts separate meetings of finance ministers and foreign ministers due to the expansion of its agenda in recent years. Collectively, the G20 economies account for around 85% of the gross world product (GWP), 80% of world trade (or, if excluding EU intra-trade, 75%), two-thirds of the world population, and approximately half of the world land area. Its purpose is to bring together systemically important industrialized and developing economies to discuss key issues in the global economy.

In its role as implementing partner in the G20 subgroup on Principles and Standard Setting Bodies (SSBs), Alliance for Financial Inclusion (AFI) will pursues several activities in the lead up to G20 Summits. Activities include promotion of the use of the G20 Principles, and gathering examples of how developing countries have implemented them. The Principles were developed in 2010 by the Access Through Innovation Sub-Group (ATISG) of the G20 Financial Inclusion Experts Group (FIEG). The Principles were originally published in the Sub-Group’s official report to the G20 and endorsed at the Toronto Summit in May 2010 and underpin the Financial Inclusion Action Plan endorsed at the Korea Summit in November 2017.

Recently, I came across a thought provoking article by Alasdair Macleod, celebrated stockbroker and Member of the London Stock Exchange for over four decades. The article, A Roman lesson on inflation, addresses the financial intervention by governments and inflation. "The US dollar is the world’s reserve currency today, and nearly all the other 170-odd government fiat currencies are aligned with or refer to it. An accelerating dollar collapse takes most of them down, just as surely as the Roman debasement propelled the world into the Dark Ages……..The future is by definition unknown, and we can only speculate how things will evolve. However, unlike the Roman experience, which took 225 years to completely destroy the denarius, its successors, and the empire itself, today’s wave of monetary destruction looks like terminating soon, after only a century or so…………..Central banks have been aware of some systemic dangers, which is why they are keen to move us to a cashless society. With no cash, there cannot be an old-fashioned bank run. Their response to every successive credit crisis has been to restrict how businesses and people can protect themselves in the event of a systemic meltdown”.

G20 Financial Inclusion Action Plan (FIAP) 2017

Under this revised G20 FIAP, the GPFI identifies four key drivers that will set the stage for continuing the progress in achieving financial inclusion: (1) recognition of the 2030 Agenda for Sustainable Development as the overarching framework for sustainable development globally; (2) the rapid development and penetration of digital innovations; (3) increased attention to the importance of responsible access and usage of financial services to the poor, strengthening the focus on underserved and vulnerable groups; and (4) the mainstreaming of financial inclusion alongside other financial sector development goals of stability, integrity and consumer protection.

Under the leadership of the Chinese G20 Presidency, the G20 Global Partnership for Financial Inclusion (GPFI) developed a new set of High-Level Principles that encourage governments to promote a digital approach to financial inclusion. These Principles were endorsed by the G20 Finance Ministers and Central Bank Governors at their meeting in Chengdu on July 22-23, 2016. “We endorse the G20 High-Level Principles for Digital Financial Inclusion, the updated version of the G20 Financial Inclusion Indicators, and the implementation framework of the G20 Action Plan on SME Financing, developed by the Global Partnership for Financial Inclusion (GPFI). We encourage countries to consider these principles in devising their broader financial inclusion plans, particularly in the area of digital financial inclusion.”- Communiqué of the G20 Finance Ministers and Central Bank Governors Meeting 23–24 July 2016, Chengdu, China.

Global Partnership for Financial Inclusion

The Global Partnership for Financial Inclusion (GPFI) is an inclusive platform for all G20 countries, interested non-G20 countries and relevant stakeholders to carry forward work on financial inclusion, including implementation of the G20 Financial Inclusion Action Plan, endorsed at the G20 Summit in Seoul.

The GPFI is the main implementing mechanism of the endorsed action plan by G20 Leaders during the Seoul Summit and functions as an inclusive platform for G20 countries, non-G20 countries and relevant stakeholders for peer learning, knowledge sharing, policy advocacy and coordination. It contributes to strengthen coordination and collaboration between various national, regional and international stakeholders, as called for in Action Item 6 of the G20 Financial Inclusion Action Plan. Spearheading the implementation were the three key Implementing Partners: the Alliance for Financial Inclusion (AFI), the Consultative Group to Assist the Poor (CGAP), and the International Finance Corporation (IFC). In 2012, the World Bank Group and the SME Finance Forum (Small and medium-sized enterprises or small and medium-sized businesses) joined the GPFI as Implementing Partner. The Organisation for Economic Co-operation and Development (OECD) joined the GPFI as Implementing Partner in 2013. In 2014, The Better Than Cash Alliance and the International Fund for Agricultural Development (IFAD) also joined as Implementing Partners.

Better Than Cash Alliance

The Better Than Cash Alliance is a partnership of governments, companies, and international organizations that accelerates the transition from cash to digital payments in order to reduce poverty and drive inclusive growth. Based at the UN, the Alliance has 60 members, collaborates closely with other global organizations, and is an implementing partner for the G20 Global Partnership for Financial Inclusion. The Alliance is funded by the Bill & Melinda Gates Foundation, Citi Foundation, MasterCard, Omidyar Network, United States Agency for International Development, and Visa Inc. The United Nations Capital Development Fund serves as the secretariat.

The Better Than Cash Alliance partners are the key drivers behind the transition to make digital payments widely available:

The Alliance for Financial Inclusion

The Alliance for Financial Inclusion, a global network of financial policy makers from developing and emerging countries, has begun a Policy Champion Program to promote dissemination of good practices. In 2012, alliance member states issued the Maya Declaration, the first global and measurable set of commitments by developing and emerging country governments to unlock the economic and social potential of the 2.5 billion unbanked people worldwide through greater financial inclusion. More than 40 countries have signed the declaration.

World Bank

At the 2015 World Bank Group-IMF Spring Meetings, the World Bank Group and public and private sector partners issued numeric commitments to achieve Universal Financial Access by 2020 (UFA2020) and help promote financial inclusion. The vision for universal financial access was first announced by the World Bank Group President Jim Yong Kim at the 2013 World Bank Group-IMF Annual Meetings.

Through the Universal Financial Access 2020 initiative, the World Bank Group – the World Bank and Financial Inclusion Commission (IFC) – has committed to enabling 1 billion people to gain access to a transaction account through targeted interventions.

And we are increasingly seeing how these policies are taking effect. Here in the UK we have the UK Financial Inclusion Commission and an independent body of experts and parliamentarians who came together to put financial inclusion back on the political agenda ahead of the 2015 General Election. The Commission is supported by MasterCard, but is wholly independent. MasterCard is committed to driving financial inclusion here in the UK, and in the 210 markets it operates in around the world.

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