Starting Monday, it will be a criminal offense in Israel to pay more than the equivalent of $1,700 in cash to a business or $4,360 in cash to individual, as the government intensifies its ongoing war on tangible money. Israel also limits the extent to which cash is used in transactions involving multiple payment methods. If the total transaction value is more than the above thresholds, cash may only be used for 10% of the purchase. Car purchases are given a higher, 50,000 NIS (New Israeli Shekels) limit -- about $14,700. Violators are subject to penalties that can reach 25% of the transaction for individuals and 30% for businesses.
With so much news about an economic reopening, a border crisis, massive government spending and exploding deficits, it’s easy to overlook the ongoing war on cash. That’s a mistake because it has serious implications not only for your money, but for your privacy and personal freedom, as you’ll see today. Cash prevents central banks from imposing negative interest rates because if they did, people would withdraw their cash from the banking system. If they stuff their cash in a mattress, they don’t earn anything on it; that’s true. But at least they’re not losing anything on it. Once all money is digital, you won’t have the option of withdrawing your cash and avoiding negative rates. You will be trapped in a digital pen with no way out. If there is no cash, there is no anonymity. Governments will know your whereabouts and habits at all times simply by tracking your use of funds through the CBDC payment system. This can already be done, to some extent, by tracking credit card transactions, but the CBDC system will make state surveillance more pervasive. China is leading the way with CBDCs. And this kind of surveillance is the real driving force behind the Chinese CBDC. China already uses facial recognition software, mobile phone GPS tracking and the purchase of plane or train tickets to track their citizens. This surveillance can be used to detect anti-state activities and to arrest dissidents or anyone who doesn’t strictly follow government orders.