In recent days, residents of the country’s capitals have been appalled by the attack on the city of Criciúma in Santa Catarina, which sparked a whole night of violence in the city and demonstrated the ability to plan, coordinate and force organized crime.
For those who live inside Brazil, this type of attack is nothing new. Similar actions have been recorded for over 6 years and have even been given regionalized nicknames. For example, in the central-west region, coordinated attacks on inland cities became known as the “new Cangaço” and killed many small and medium-sized towns in the region with violence similar to that of Criciúma.
There have been several proposals to combat and prevent this type of crime. Among them the idea that the way forward would be to arm the population to respond. It is hard to imagine an army of armed “good people” facing bandits armed with tactical rifles, explosives and war strategies.
As Silvio Meira, professor emeritus of computer science at the Federal University of Pernambuco, said very well, all these actions have one element in common: they are articulated in order to steal paper. In other words, this type of action only persists because the country is still a long way from promoting digitization of the means of payment and the reduction of paper money, as other countries have done.
In short, to put an end to violent acts like this, which has become an epidemic in Brazil, dependence on physical money must be reduced. For this it is not necessary to end up entirely in paper money. It would be enough to make the cost of such a measure prohibitive. For example, remove the higher valued notes like R $ 100 and R $ 200.
High quality banknotes are rare in the hands of the absolute majority of the country’s population. On the contrary, they are very common and useful in the hands of members of organized crime, tax evaders and corrupt politicians.
In other words, an efficient public policy would consist in planning and implementing the decline of paper as a means of payment in the country and its increasing substitution by digital means of payment.
The start of Pix was an important step in this direction. The start of the Caixa Tem application also had a very positive effect in this regard. The point is that there is still a clear public policy decision in this regard. It makes a lot more sense that the daily money circulating is made up of smaller bills used for small transactions, and the higher value transactions all turned into digital transactions.
Countries as diverse as Sweden, Norway, Denmark, India and China as well as England are moving in this direction. For example, today in Sweden only 15% of payments were made in paper money. It is planned to further reduce this percentage compared to the previous year. In other words, digital crimes exist and can cause enormous financial losses. One thing is certain, however: Nobody is investing in rifles, explosives, and conquering entire cities to use them.
It’s over – completely paper-based economy
It is already – digitization of the economy and means of payment
Coming – increasing integration of cryptocurrencies and so-called DeFi (Descentralized Finance) into the economy