RE: “Rwanda to go cashless by 2024: Are you on board?” (The New Times, December 5).
I am not onboard with Rwanda or any country going cashless in 2024 or anytime in the foreseeable future until growing cyber security risks are mitigated.
For over 20 years, I have brought digital financial/mobile financial services to the unbanked globally. There has been remarkable progress over this time period, especially in recent years with the advent of mobile money. In March 2015 the World Bank announced another 700,000 unbanked becoming financially included since 2011. That 2015 announcement stated that 2 Billion remain unbanked. Now in late 2017, almost 3 years later, the World Bank should soon be revising this number downward, significantly.
Telecom-carriers, banks and technology companies have all had key roles in deploying and scaling financial inclusion solutions that leverage today’s near ubiquitous reach of mobile phones. Unbanked communities (often rural in developing countries) that had been beyond the reach of traditional distribution models by banks (i.e.: the costly physical presence of a bank branch) are now in reach and increasingly on-boarding to digital mobile financial services - progress I continue to advocate and help accelerate.
However, increasingly efforts to “financially include the unbanked” are being bundled with aims some have for a “cashless society”. These are these two fundamentally different objectives whose overlap is being exploited and whose differences and risks are downplayed and glossed over.
At least weekly is news of cybercrime—on financial institutions, on retailers, on governments and more—that cost billions. The ubiquity, frequency and sophistication of cybercrime continue to grow faster than cyber security defenses. In recent months even highly touted Blockchain technology experienced multi-million dollar thefts of cyber currencies.
Until (if) effective cyber security measures can be devised and instituted ubiquitously, migrating/ mandating any society to become cashless (via regulations, policy changes, etc.) is irresponsible and potentially dangerous. Digital Financial Services (DFS)/ Mobile Financial Services (MFS) are very helpful for on boarding the unbanked, however, for the foreseeable future DFS/MFS must remain complimentary to, not a replacement of non-digital currencies. The downside risk to any cashless society could be catastrophic and will remain so until (if) game changing cyber security can be developed and universally instituted.
Imagine January 1, 2024—Rwanda officially becomes 100% cashless. Then imagine on January 2, 2024 Rwandans wake up to news that an overnight cybercrime has zeroed out the cashless balances of all 12m+ Rwandan civilians without a trace. We are talking about potential civilization collapse magnitude risks.
Farfetched? At a recent Global Payments Industry conference a retired US general and former NSA (National Security Agency) director not only expressed concern about the inadequacy of the USA’s cyber security but even requested the public to help pressure their elected representatives to take cyber security needs more seriously.