What even is money any more? Perhaps you’re asking this question as well. I found a toonie on the floor the other day and stared at it, the way I might stare at an antique snuff box in a museum: Something vaguely familiar, once considered useful. I don’t think I’ve actually touched a toonie in months.
There is a dissonance around the current moment, the misery of the working world versus the exuberance of financial markets, that I would like someone to explain to me. Perhaps in the way that The Big Short used Margot Robbie to explain housing bubbles and Selena Gomez unpacked collateralized debt obligations.
Maybe Rihanna could come to my house and explain the current mania for non-fungible tokens. “See, there are these digital collectibles, and people are paying crazy money for them, except it’s not really money.” This would of course make me think of one of her greatest songs, and I would ask her when we can expect new music. Now that’s something of value.
My brain is slightly broken at this point, but I think I get it: We no longer use cash, but some of us spend vast amounts of cryptocurrency to own the digital copyright to a digital artwork. These are the non-fungible tokens we’ve been reading so much about. I’m not mocking them; the mockery train left the station once Lionel Richie climbed on board. (Mr. Richie and Snoop Dogg have recently signed up to provide content for a new NFT marketplace.)
The NFT bubble does bring to mind Ms. Robbie drinking Champagne and explaining the last time the world lost its collective mind, which led to that little spot of economic horror in 2008. Earlier this month, an NFT sold for nearly $70-million at Christie’s auction house. That jpeg, a collage made by digital artist Mike Winkelmann (a.k.a. Beeple), was sold to investor Vignesh Sundaresan, who paid for the work not in cash (who has cash!) nor credit nor even e-transfer, but using the cryptocurrency ethereum. The work will now be his, or perhaps I should say the “work” will now be “his,” its provenance recorded in a blockchain until he wants to sell it on.
By that time, though, the NFT bubble may have popped. I’m not saying it was the arrival of Mr. Richie that did it, or even the Teletubbies, those avant-garde stuffies. Perhaps the end was prophesied when New York filmmaker Alex Ramirez-Mallis decided to sell a recording of his flatulence as an NFT for $85. Not the fart itself, he was quick to clarify: “Just the idea of the fart.” Now there’s a man who understands bubbles.
I understand the fascination with NFTs. We’re enthralled by the magical properties of wealthy people’s money, the way it appears when they need a government subsidy and disappears again when it’s time to pay taxes. It may be all the magic left in this tawdry old world.
But even more interesting to me, and certainly much less remarked on, is a phenomenon that affects all of us, especially those who will never buy a collage using ethereum. It’s about the disappearance of cash. Think about how often you’ve paid with cash or coins since the pandemic began. It’s likely not very often.
At the beginning of the crisis, it was understandable. We weren’t sure how the disease was transmitted, and only recently have we acknowledged that airborne transmission is much more dangerous than surfaces. According to Payments Canada, two-thirds of people reported that they were using less cash at this point last year, and contactless payments soared. Trucks arrived with groceries in front of our houses and the money went poof from our bank accounts.
Many retailers put up signs saying that they would no longer accept cash, even as the Bank of Canada begged them not to end a form of payment that is vital for many. “Refusing cash purchases outright will put an undue burden on those who depend on cash and have limited payment options,” the bank said in a statement last April.
Anti-poverty campaigners warned that a move to contactless pay systems will hurt people who receive some income through cash, such as panhandlers, and those who can’t afford the fees associated with bank accounts.
One of the underacknowledged benefits of cash is that it provides a certain amount of freedom for unhoused and marginalized people that they wouldn’t otherwise have. It can be spent however they like. “One of the things that happens when you’re homeless is that your autonomy gets eroded continuously, often by the institutions that are there to help people,” Stephen Gaetz, an education professor at York University and director of the Canadian Observatory on Homelessness, said in an interview. “Everybody likes the idea of being able to choose what they want to eat and when they want to eat, and we don’t extend that privilege to people who are homeless.”
So the toonie you dropped in someone’s hat was actually a tiny bit of freedom. No toonie, less freedom. Of course, generous people have found a way around the cash deficit by buying groceries or store cards for people in need. But there’s still a deficit where the coins used to be.
The Bank of Canada offered comforting words in its survey last year, which showed that three-quarters of Canadians don’t plan to go cash-free within the next five years. (The bank is not exactly a neutral player since it makes money from producing bank notes, in a process called seigniorage.)
I wonder how much cash we’ll see in five years’ time. In the meantime we can watch money perform its magic, transmuting into art for some, disappearing altogether for others.
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