Former White House advisor: World’s central banks will use blockchain tech to create a universal cashless system

Long-time White House advisor, Dr. Harald Malmgren, believes blockchain tech is likely to be used by the world’s central banks to create a “universal cashless system”.

“The people now intensively working on a mechanism for a cashless society are building it around the concept of blockchain technology. In essence, there would be a single ledger that records each expenditure or revenue event (the block), linking them chronologically with every other subsequent purchase, sale, or revenue event in a recorded chain,” said Malmgren.

For Malmgren, the creation of a universal cashless system carries significant risks. Beyond fears related to data privacy, a no-cash framework could lend itself to sociological governance whereby regulators start trying to oversee daily activities more actively.

“If your funds are being used in a statistically abnormal manner then they can start routinely asking you for an explanation, if it was drug money or money laundering or purchases of regulated products like alcoholic beverages or firearms,” he added.

If used in that fashion, Malmgren noted, the blockchain would help create an environment in which regulators have vast troves of data with which to monitor, categorize and regulate spenders. This system, he argues, would also enable more direct financial engineering as central bankers saw fit.

“One can understand the benefits, but there are potential negative consequences for individuals and businesses. And the Social Contract between citizens and their governments would be threatened,” he concluded.