The Disappearance of the Fiscal Exit: Cashlessness and the Expansion of Monetary Authority

The transition to cashless financial systems is typically framed as a question of efficiency and crime reduction. This paper argues that the primary concern is not convenience but the dissolution of the ‘fiscal exit,’ the ability of citizens to hold assets outside institutional permission. Using Fisher’s Quantity Theory of Money, Goodhart’s Law, and the Zero Lower Bound constraint as theoretical anchors, and drawing on the Canadian Freedom Convoy precedent, China’s e-CNY programme, and Sweden’s partial reversal of cashlessness, the paper identifies a ‘Resilience Paradox’: the more a society optimises monetary velocity and oversight, the more it creates a single point of failure for individual financial autonomy. The analysis concludes that the fundamental tension in cashless transition is not technological but institutional, the erosion of structural limits on centralized monetary intervention.