The War for our Wallets: Field notes from Oman

I’ve been on the road for the last week. Specifically, desert roads in Oman, in 41°C heat, in a small Toyota Corolla with a broken air-con. Soon after taking the photo above I got lost in a landscape that looked like it came out of Dune, with children in remote villages laughing at me as I tried to manoeuvre the rental car through sand drifts.

As an English-speaker, I often find myself publishing my work into the bubble of US-European thought, but it’s always a blessing to escape that comfort zone and to be confronted with something wildly different, and the Sultanate of Oman is certainly that.

I have written about how the world economy is interconnected, like a superorganism tied together by the global monetary system, but that doesn’t mean the interconnected parts don’t have their own logics. At a global scale, Oman is part of the energy complex we all rely upon - it sells oil to accumulate dollars - but at a local scale it’s a parallel world, tinted by parallel cultural filters and a parallel media landscape. While every Western news station rolls out its lopsided coverage of the tragic calamity unfolding in the region, every Arabic TV channel I saw while there was rolling out a parallel commentary, one in which Arabic people take centre stage, and are normal, rather than being strange others far away.

Just north of Oman, across the gulf, is Iran, while Yemen is on its southern border. Right now the Sultanate is an oasis of comparative calm amidst the conflict, but the region as a whole - and its oil - is of acute interest to every major power in the world, and has been for a long time. Oman was in fact a regional imperial power in the 17th and 18th centuries, with a great seafaring trade empire. I stayed for a couple nights in Sur, which was a launching point for Omani dhows to head down to Zanzibar, from where they were major players in the East African slave trade.

In the 19th century Oman fell into infighting, and British colonialists took the opportunity to extend their influence, signing treaties with local elites, granting them protection in exchange for securing their own imperial ambitions. Fast forward to 1970, and Sultan Qaboos took over as a modernizer, finally banning slavery and using the country’s growing oil revenues to undertake massive infrastructure projects.

The sultan also used some of that money to hire some of my dad’s friends from Zimbabwe to train and serve in his elite armed forces. My dad is a former special forces soldier, and, yes, many of his friends are former mercenaries. In my childhood I’d hear stories about the Sultanate when they arrived back after lucrative soldier-of-fortune gigs. Oman certainly has a brutal past, and it most definitely is an authoritarian country, but nowadays it’s also very rich, which means it has that well-functioning autocracy vibe, like Singapore. In fact, some people call it the ‘Switzerland of the Middle East’, because the country tries to stay out of regional conflicts and hedge its geopolitical bets, but the historic violence of imperial trading life still turns up in symbolic form in the ceremonial Khanjar dagger that Omani businessmen wear as part of their formal attire.

As business attire goes, I must admit that the Omani style is way more bad-ass than dull European suits (side note: I wonder what ceremonial weapons an English banker might wear in a parallel reality?), but for a couple days in Oman I was surrounded by different forms of formal attire because I started my trip at the Global Currency Forum, a get-together for central bankers and currency industry folks, set within the tinkling piano music of a five-star hotel resort on the coast below the capital city Muscat.

Because I’m a defender of physical cash, I sometimes get invited to these shindigs and get to meet a fair number of central bankers. The great thing about hosting these forums in tourist complexes is that, eventually, the central bankers get drunk, shed the suits and start wearing tiki shirts, and that’s when you can start to tap into what they really think about things (Oman is Islamic, but they do allow alcohol to flow within the hotels that Western investors and dealmakers inhabit, knowing how it loosens things up).

My primary mission while there was to do pro-cash work among central bankers, and to suss out the vibe in the global monetary system from the executives present, but I’m also an anthropologist, and I couldn’t help but notice that the majority of people doing the non-elite menial work - serving, cleaning, construction etc - were from India, Bangladesh and Pakistan. This sent me on a side-quest, in which I discovered that about 30% of Oman’s population is made up of these migrant workers (in the nearby UAE, the percentage is much higher, at 85%). After chatting to some Indian hotel workers, I discovered it’s seen as a good temporary place to build up some savings before returning home, because wages are good while the oil revenues roll in.

Still, like all Middle Eastern oil states, Oman is very aware of how precarious it is to rely on a single commodities like this - half their GDP is accounted for by oil and gas - so they take their oil money and funnel it through their sovereign wealth fund to buy up non-oil assets - like shares in US tech companies - to diversify.

That takes us back to that strange meeting between the local culture - formed in the scorching desert winds - and the global system, with its interconnected stockmarkets and interconnected currency ecosystems. So, what did I learn about the latter at the Global Currency Forum 2024? Below you’ll find an audio and text briefing of 10 big themes, in particular in relation to the battle between digital payments and good old hard cash in an age of AI.

1) Different countries are different, but are subject to the same digital progress narrative

I do a lot of pro-cash work, which excites certain people in countries where cash is under threat, but when you’re at a global forum you realise that not everyone is in the same situation. There are many countries in sub-Saharan Africa, the Middle East and South America, for example, where cash usage is very high, so my passionate calls to protect cash are met with perplexed looks.

In places like London you will now often be culturally shamed if you try to use cash, but that shame is unevenly distributed in the world. For example, in rural South Africa, nobody feels any sense of doing something ‘wrong’ by using cash.

That said, in a global economic system that always prioritises expansion and acceleration, there’s a constant low-level cold war on cash that is slowly propagating, even in places where cash usage remains high. This is because, when compared to digital payment, cash represents values like localisation, autonomy, simplicity and privacy that stand in the way of the systemic tendency of frictionless globalisation, dependence on large-scale corporate infrastructure, complexity and surveillance.

One element of this ‘war’ is ideological: we find a progress narrative that emanates out of the global tech and corporate sector. In this story, cash is presented as a low-grade ‘horse-cart’ of payments that must be upgraded by digitisation (see The Accelerationist Playbook). This narrative is in fact very hegemonic, and it’s very common for elites in countries that have high cash usage to imagine that their countries are ‘behind’ in a global ‘race’. They start to imagine that countries like Sweden, which are ‘in front’, are high-status places to be emulated.

2) Those at the front are worried

Curiously, though, those who are at the imagined front of the imagined global race to cashlessness - like Sweden - are increasingly concerned that they might have gone too far. That’s because the monetary system is layered, and the flashy digital layer is in fact a system of ‘digital casino chips’ issued out by commercial banks, and these chips are psychologically and legally tethered to a foundational layer of cash (i.e. when you go to an ATM, you’re essentially ‘cashing in your digital chips’). This means that if cash gets undermined, you also get problems in the ‘cashless’ digital system.

This structural reality contradicts the progress narrative sketched out above, but the global capitalist class has no interest in letting go of the ideological story (and often don’t actually understand how the monetary system works, so believe their own propaganda). This means central banks, which are a core institution of global capitalism, are stuck in a weird twilight zone. On the one hand, their job does require them to understand the layered nature of the monetary system, and this means they generally do understand the need to protect cash, but they cannot say that too forcefully, for fear of looking like they’re ‘behind the times’. This means they often issue very weak defences of cash, such as the Swedish central bank making a gentle suggestion that perhaps Swedes should consider holding some cash in reserve in case Russian invades or hacks their digital payment systems.

3) Officially, central bankers have no analysis of commercial bank and tech power

Almost every central bank report I read on payments starts with some mandatory reference to how people are switching to digital payments - cards and apps - and this is generally attributed to something bland like ‘changing public attitudes’ or ‘shifting preferences’. Put differently, it’s implied that this is some organic evolution, an inevitable and natural shift driven solely by ordinary people from the bottom-up. With this thought-structure in place, any attempt to stop or reverse that trend is seen as ‘futile’, ‘unnatural’, or as a top-down imposition.

People like myself, though, not only try to showcase the dangers of cashless society, but also challenge the bottom-up story about why it happens. It’s certainly true that we live in an ‘increasingly digital world’ but that slide into digital domination is as much a product of inertia, addiction and propaganda as it is a ‘natural’ occurrence.

Part of the reason I’m sensitised to this is because I come from an anthropology background, and - unlike economists - anthropologists generally don’t start from the assumption that the world is driven by solo people making solo decisions in a vacuum. Rather, we are all subject to cultural forcefields that push us down certain paths, or shame us if we don’t conform, and those cultural forcefields are subject to interference from above.

Many people, when moving to digital payment, are really just conforming to a new structural situation, and conforming isn’t the same as choosing. In fact ‘changing public attitudes’ can be induced by all manner of top-down interventions, including, for example, the situation of British Airlines, or the British Museum, or Transport for London, blocking you from using cash.

This is where having some knowledge of the layered nature of the monetary system helps: as mentioned, the ‘cashless’ units we use are like ‘digital casino chips’ issued out by the banking sector, and the banking sector - and all the digital payments industry that surrounds it - has long had a massive interest in slowly pushing us away from cash, because it interferes with their own digital payments businesses and drive for data. This is why they, and fintech firms, will not only ideologically attack the cash system, but will also infrastructurally attack it, making it harder and harder to use by slowly shutting down the cash infrastructure.

4) Unofficially, central bankers will acknowledge this

Central bankers aren’t stupid, but they do occupy a weird position between the state - which underpins the monetary system - and the banking sector, which runs the digital payments systems. Officially, central bankers are supposed to be ‘neutral’ - not telling the public what payment form to choose - but the reality is that the commercial banking sector is very much not neutral: they constantly tell the public what payment form to use, and spend a lot of time trying to fuck the cash system up by blocking you from accessing it and running endless anti-cash propaganda campaigns to reduce public trust in the central bank’s very own form of money.

I’ve had central bankers from around the world privately acknowledge this to me for quite some time, but I was delighted to see a central banker from Hungary be brave enough to finally say this on stage at the Currency Forum: she noted that banks see providing access to cash (which is a competitor to their digital payments systems), as a cost, and deliberately attempt to degrade the cash infrastructure. She noted that while this serves their own needs, it’s not in line with the public need. She also went on to say that businesses that prevent their customers from paying in cash are also 'not in line with customers', who want choice. She called for central banks to be proactive in legislation to project cash acceptance and access.

This was refreshing, but it’s still a relatively rare thing for a central banker to say, because their institutions are still structurally biased towards supporting the overarching global narrative around digitisation, automation and acceleration. This is one reason why central bankers stumbled into the realm of ‘CBDC’ - central bank digital currency.

5) Central bankers still don’t know why they’re playing with CBDC

I’ve said this for a long time now, but - despite all the conspiracy cranks who are convinced that central bankers yearn for a CBDC to control us - I have yet to meet a central banker who has any conviction whatsoever in CBDC. As I describe in my Zen and the Art of CBDC Analysis (part 1 and 2), they’ve sort of stumbled into it in a half-hearted fashion. They see the cash infrastructure being undermined, and realise that this poses structural threats, but rather than forcefully coming out to promote cash, they found themselves proposing a hypothetical form of ‘digital cash’ that won’t contradict the standard digital progress narrative.

For some reason it reminds me of one of those British stag-dos (also known as bachelor parties or buck night), where a group of men accidentally end up trawling through the clubs of Amsterdam, driven by a kind of group inertia that leads them down some route that nobody really wants, but which they all go along with for fear of looking out-of-sync with everyone else. Building a CBDC isn’t exactly the same as getting stoned and paranoid in an Amsterdam strip-club, but you really do sense that central bankers have drifted into a project and can’t stop, even though they have no sense of direction and nobody really wants to take charge.

This feeling of mine was confirmed again at the Global Currency Forum. For example, one central banker told me that they’ve shelved their own CBDC experiments and are just letting the European Central Bank (ECB) do the research and experimentation work, safe in the knowledge that if the ECB experiment work they can go ahead and copy it or tag along. Another from within the ECB system, told me that it will take ages for anything workable to come out. He pointed out that the ECB would need to get an entire new skyscraper to host all the employees required for any actual CBDC.

6) The digital progress narrative is precarious, especially with AI in the mix

The digital progress story turns up in all those statements about a ‘digital revolution’ or a ‘digital transition’, and this continues to infect much public and official discourse. For example, in its attempt to seem enthusiastic and futuristic, the ECB has proposed a double-standard for any future CBDC relative to cash. Both are forms of public money, but - because official discourse must present cash as a ‘horse-cart’ that’s behind-the-times - their proposals for cash protection are half-hearted, like a public administrator in the 1900s laying out some nominal protections for those who ‘still’ use horse-carts in the face of the inevitable shift to auto-mobiles. By contrast, they talk about how any future CBDC must be accepted and accessible everywhere.

Even though, from a pragmatic perspective, CBDCs are struggling, the ideological tide is with them, insofar as digital hype is the prevailing progress narrative. That said, it’s uncertain as to how long that tide will last for.

For a long time now, I’ve been arguing for a shift in narrative, in which cash is seen both as a foundational form of money that underpins the ‘cashless’ units (that’s the casino chip metaphor I use), but also is seen like a ‘public bicycle’ (or mountain bike) or payments, protecting autonomy and resilience, and preventing us from having total ‘Uberisation’.

Interestingly, this reworked narrative is actually getting easier to sell in the age of AI. I was fortunate to moderate a discussion on AI, and was struck by comments made by Axel Dauchez, serial entrepreneur and former CEO of the French streaming platform Deezer, who is thick in the AI weeds. He noted that public distrust in the digital world is getting higher, and will only get higher as the AI world floods the web with bullshit fake news, fake people, deep fake videos and so on. Even basic image searches now looked crammed with fake crap, and the sense of the Internet representing something progressive and hopeful is increasingly shaky. Another discussant, Stephanie Hare - author of Tech is Not Neutral - also gave some great insights into how this new digital frontier has insane resource and energy requirements. Just doing a single ChatGPT prompt uses up a bottle of water in cooling. As the tech industry pushes people to use that for the most banal things, the sense that there is something unhinged and uncontrollable going on in the tech space starts to increase.

7) In this unstable context, an analogue revival - and a cash revival - is plausible

It’s true that we’re told that tech makes our lives easier, but it’s far more apparent that it’s making our lives faster and more burned out. Digital spaces are rife with content issues, security issues, resilience issues, and are increasingly vectors for geopolitical attacks. Many people are also starting to understand that the digital space is driven by addiction, and that it’s sucking up a lot of energy and resources. This growing distrust in the digital is providing an opportunity for the revival of the analogue, and a revival of simplicity.

One of the simplest slogans to come out of this is ‘cash doesn’t crash’, and Mark Gould from the US Federal Reserve pointed out that he often now describes cash as being like the stairs in a skyscraper, a reliable, simple and lasting alternative to the flashy tech-laden elevator (humble brag: I think Mark might have got this metaphor from me, and I think I might have developed this metaphor on a suggestion from Rohan Grey, who is a pro-cash advocate in the Modern Monetary Theory scene).

One really interesting point that came up from Tom Fletcher is that human beings are often torn between liberty and security - wanting freedom but also wanting certainty - and these can often work in opposite directions. He noted, though, that cash might be a bridge between these poles: representing freedom from Big Tech and Big Finance, while also being reliable in moments of instability. This was certainly reinforced by Mark Gould, who showed data of massive spikes in cash demand during big crises, including Y2K, the 2008 global finance crisis, and COVID.

8) But cash protection has a long way to go…

Pro-cash legislation involves measures on access - making sure the cash infrastructure is strong is easy to access - and acceptance - making sure cash is accepted by businesses. These are related, and have feedback loops between them: for example, one reason why businesses in places like the UK are increasingly refusing to accept cash is that banks are shutting down the access infrastructure - for example, by shutting down bank branches and thereby making it much harder for businesses to deposit cash. This pushes the businesses towards refusing cash, which in turn is weaponised by the banking sector to further shut down the cash infrastructure (‘businesses are going cashless, so don’t need branches’).

The problem though, is that central bankers are still generally reticent to come out and openly support cash in a proactive and forceful way. In the UK, Bank of England employees that work in cash departments are firmly subordinated to the pro-digital line, and in many low-cash countries - like Netherlands - there is a ‘hospicing’ mentality to cash protection: they imagine that cash is in terminal decline, and that you simply have to slowly manage that decline, like offering a comfy bed to a patient who is living out their last days.

This is a general problem, and it’s also deeply related to the aforementioned digital progress narrative: on average, central bankers are still prone to accepting the general Silicon Valley vision in which cash is imagined to be like the horse-cart, rather than the public bicycle or stairs in a skyscraper.

One exception to this is German central bankers, who, in my experience, have no problem being pro-cash. At the Global Currency Forum, Burkhard Balz, who is on the executive board of the Deutsche Bundesbank (the German central bank), was no exception. He was very overtly pro-cash, seeing it as a key and lasting part of any balanced monetary system.

9) And there are vested interests getting in the way

Even if central bankers can be brought to see that cash protection is important, they face a powerful pro-digital lobby that acts against pro-cash legislation. We’ve seen, for example, Amazon lobbying against cash acceptance laws in Philadelphia, precisely because cash stands in the way of full automation. The strength of these lobbying efforts was further illustrated to me by George LeMaistre, who set up the Consumer Choice in Payment Coalition, a civil society group that introduced the Payments Choice Act at a federal level, which would compel businesses to accept cash amounts below $500 in the US. It got through the US House of Congress before being blocked by a republican senator with ties to the National Retail Federation, the lobby group for a lot of chain stores, many of which - like Amazon - want the option to refuse cash to automate their operations.

10) Crypto and tech bros might be smart, but their smartness breeds ignorance

Mark Gould, who is the chief payments executive of the US Federal Reserve, noted how he receives incredulous looks from Silicon Valley people and crypto bros when he talks to them about the cash infrastructure. They have disbelief that anyone would ‘still’ use cash in a world of hyper-digitalisation.

But, while a lot of people in fintech and blockchain innovation scenes are smart, smartness is no guarantee of wisdom. Humans are clever monkeys, but we’re often not clever enough to see how our own cleverness dazzles us and makes us ignorant. In fact, the crypto scene is perhaps the purest example of this: I’ve spent a lot of time in crypto circles, and - yes - there are a lot of very bright people there, but it’s astounding just how totally detached from reality they often are.

It was interesting to note how little reference there was to crypto-tokens like Bitcoin or Ethereum in this year’s Currency Forum. That’s probably because they’ve largely dropped off the hype cycle and been replaced by AI hype (albeit, there is chatter about stablecoins).

But, while the world’s media fixates on the ‘next new thing’, there’s something strangely refreshing about interacting with the comparatively dull scene of central bank cash logistics, because - in the end - this ‘boring’ work has really big impacts for billions of people. Cash is a critical infrastructure, and can work offline. Somehow, being in the Middle East - where missile strikes are currently raining down on the electricity substations and communication lines - it hit me how vital it remains for so much of the world’s population, despite the tech bro arrogance.