Los Angeles Officials Oppose Businesses Going Cashless

Bitcoin is for sale at a shopping mall ATM in Paramus, New Jersey, on March 13, 2023. (The Canadian Press/AP-Ted Shaffrey)

Three Los Angeles City Council members held a press conference April 30 urging the city to ban cashless businesses, which they argue exclude seniors, low-income residents and minorities.

“The simple fact is that cashless businesses create an economy that is not inclusive and accessible to some of our most vulnerable populations,” Councilwoman Heather Hutt said during the press conference, which took place outside of City Hall.

In a statement, Hutt pointed to “low-income communities of color, young people who do not meet the age qualifications for credit or debit cards and seniors who have not transitioned” to digital banking as those impacted.

Councilwoman Eunisses Hernandez, who along with Councilmembers Hugo Soto-Martinez and Katy Yaraslovsky seconded the motion when Hutt introduced it last year, also raised concerns about people who might need to use cash for privacy and security purposes.

“Not only does it leave out people who are unbanked, a population that is disproportionately people of color, immigrants and elders, but it also excludes people who cannot use a credit card or debit card for a number of reasons,” Ms. Hernandez said at the event.

“That includes victims of sexual assault, people fleeing domestic violence, and others whose personal safety can be at risk when their purchases and locations are traceable through the digital banking system,” she said.

Related Stories

What Happened to Bitcoin?

4/18/2024

Jamie Dimon Highlights Crypto’s Criminal Link: ‘I Will Personally Never Buy Bitcoin’

3/12/2024

Such anxieties—over digital surveillance, the elimination of cash, exclusionary or punitive banking practices, and privacy and security issues that arise with the loss of anonymity—are not new.

But they have in recent years been more common among conservatives and Republicans, as well as libertarians and crypto enthusiasts, who warn that a wave of politicized debankings and the global move toward Central Bank Digital Currencies (CBDCs) risk turning the U.S. into a Chinese communist-style surveillance state.

In 2018, China’s social credit system, while not yet deployed nationally, prevented 23 million people from traveling on account of their “behavior crimes.” The country has accelerated its transition to a cash-free society with the introduction of a digital yuan.

Hernandez and Soto-Martinez are staunch progressives who won their respective elections with backing from the Democratic Socialists of America. Their full-throated support for preserving cash as a means of economic exchange, while delivered in the vernacular of social justice, dovetails with an already well-articulated opposition to digital currencies and cashless economies on the grounds they will enable exclusionary, punitive and authoritarian practices.

Debanking scandals involving prominent public officials, businesses, religious organizations and ordinary citizens in the U.K., the U.S. and Canada over the past two years have drawn scrutiny of routine practices that amount to sanctioned illegal blacklisting, sometimes based on political affiliation. Critics of digital currencies argue consolidated authority and surveillance of citizens’ transactions would invite financial tyranny.

While his administration appeared keen on the idea, President Trump later vowed to never allow a digital dollar if reelected, and at a GOP primary debate last year, Florida Gov. Ron DeSantis said he’d throw the idea in the trash can.

“One of the dangers that we’re going to face, Biden wants, is a central bank digital currency. They want to get rid of cash—crypto, they want to force you to do that. They’ll take away your privacy, they will absolutely regulate your purchases,” DeSantis said, vowing the idea would be “dead on arrival” on his watch.

In 2022 Biden issued an executive order calling for the “highest urgency” in CBDC research and development, suggesting the U.S. did not want to fall behind the 130 countries already working on their own versions. China’s acceleration in this space has sparked anxieties that the digital yuan could challenge the U.S. dollar’s global dominance.

Moves to usher in CBDCs and go cashless have proved wildly unpopular, both in the U.S. and in developing countries like Nigeria, where people took to the streets to protest their government’s push toward a 100-percent cashless society. Last year, a Bank of Canada survey reported more than 80 percent of customers said they wouldn’t use a digital currency, and thought regulations should be enacted to preserve cash as a form of payment.

The U.S. Federal Reserve can’t issue a CBDC without express approval from Congress, and Fed Chairman Jerome Powell in February reiterated that “nothing like that is remotely close to happening.”