De La Rue chairman Philip Rogerson said:
“While disappointing to announce this trading update De La Rue, as the market leading banknote printer, remains a strong, profitable and cash generative business. We will continue to pursue efficiency gains, invest in the business and in R&D for the future.”
Read: we must cut costs and find other ways to stay in business.
While De La Rue has good possibilities to win a contract to print Bank of England notes for ten more years, including the next generation of plastic banknotes, the value of the contract is believed to be lower than expected. Other central banks may now follow suit.
Profits for this year are now expected to be significantly lower than in 2013/14. The company said prices and margins for its printing services and secure paper used for banknotes were being squeezed, and analysts say its banknote printing business is the real cause for concern.
Perhaps printing money on paper costs too much, especially in view of today’s sophisticated anti-counterfeiting measures. Paper money, one of the pillars of the life texture of previous generations, is becoming obsolete. Fast.
If anti-counterfeiting measures are a dominant part of the cost of printing paper money, then Bitcoin has an important advantage here, because it can’t be counterfeited. Shouldn’t nation states and their central banks jump on the Bitcoin bandwagon to save money?
Well, not so fast. Another important difference between Bitcoin and fiat currencies is that Bitcoin is not issued by a central bank operating under the authority and control of a nation state. Furthermore, Bitcoin threatens to obsolete the very concept of centralized banking. The distributed blockchain stored on all Bitcoin nodes is a permanent and verifiable record of everyone’s holdings, all by itself and without the help of Big Brother.
Is that appealing to central governments and banks?
Therefore, despite the in my opinion obvious advantages of Bitcoin, I don’t think digital, distributed, and programmable cryptocurrencies will be adopted by governments anytime soon.
Cash as-we-know-it may indeed disappear in one or two decades, but it will be replaced by credit cards and technological evolutions thereof, issued by financial institution controlled by the state. Unfortunately, the disappearance of cash will be a step toward the elimination of personal privacy and an Orwellian society where everyone lives under 24/7 surveillance, from the cradle to the grave.
I don’t want to get too political here, so I will just say that I don’t want my grandchildren to live in that world.
Therefore, I think we need to foster and protect the right to privacy in the economy and all aspects of society. It’s here that Bitcoin comes to the rescue: cryptocurrencies are here to stay, and they must continue to function as the electronic equivalent of private, untraceable cash.
Images by De La Rue and Shutterstock.
Last modified (UTC): September 26, 2014 18:40