First things first - Crime

Posted to Facebook 26 July 2025

Crime and corruption are the root of our why our problems are getting worse and not better. Without a step change for the better - all other changes will be in vain.

What?

South Africa should cease to have cash as legal tender and should use digital currency (Rands not bitcoin) only.

Why?

1) Imagine a drug addict is found dead after an overdose. In a digital currency world, a simple search of their payment history will identify their drug dealer. A search of the dealer’s payment history will identify the drug cartel. A search of the cartel’s records will identify all the people paying the cartel (the other drug dealers). In practice dealers will have no way of getting paid for their drugs and will be out of business.

2) Cash in transit heists will disappear

3) Robbery of cash will not exist. Even if forced at gunpoint to transfer your money – police will easily trace where it has gone.

4) If goods are stolen – as soon as one identifiable item is found in someone’s possession – the chain of criminals from thief to fence to retailer will immediately be traceable.

5) Cash industries and the informal economy will no longer be tax free – so the tax base will be widened.

6) High level corruption will become much easier to track and brown envelope corruption cease.

7) Immediately it is announced that cash is destined to become worthless at some date – everyone who has hidden cash for any reason will need to bring it into the system. Even in the most innocent - a person who hides it in the mattress instead of putting it in the bank – the cash will need to be regularised. This will cause an increase in bank deposits – making more money available for banks to make loans to grow the country. People who have collected illegal “hot” cash will need to spend it in order that they don’t lose it. A mini boom will result.

8) Insuring against cash (and other crime) losses costs everyone – reducing this cost will boost the economy.

9) Reducing crime will boost tourism.

10) The revenue service will find it much easier to track tax avoidance.

11) The reserve bank estimates that having cash in the society costs R30 billion a year

How ?

The government need to announce that as of a date two years hence, no cash money will be regarded as legal tender – it will become worthless paper.

Government will need to negotiate with banks that part of their duties in return for the oligopoly they have on banking services is to provide an account and debit card for anyone who supplies biometric identification (large account holders still requiring full FICA) at a minimal prescribed rate (i.e.: minimal bank charges).

Why not?

1) Not all people have bank or cel - phone payment availability now.

The percentage of people who do not have at least a phone and thus easy access to phone payment options is small. Given a two-year lead time and banks co-operation and the motivation that cash will soon be useless – this problem will reduce to insignificant levels.

2) Children will not have a way of paying for goods.

This is a minor problem as children should not be paying for life critical purchases, and banks can supply debit cards for children which their parents can fill if needs be.

3) Corrupt officials and politicians will resist this as their source of illicit income will dry up.

Yup!

4) Criminals will simply switch to crypto currencies.

This is true but cumbersome for them. In any event, police are increasingly able to trace the money flows even in crypto currencies using tools such as Elliptic and QLUE.

5) High level corruption usually does not involve cash.

True, but at least there is then a thread of cash flows available in the banking system for investigators to follow with the appropriate warrant from a judge.

6) Government “big brother” will be able to track everything I do – this is a loss of my privacy / personal freedom.

This is also potentially true, although few legal cash transactions are really secret. Having digital cash only does not make access of the state to your bank accounts easier. But we do need to be sure that the justice system is independent of the government of the day and honest to curtail the risks – please see Blog #2 next week “the right to honest government”.

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