The chief economist of the United Kingdom was musing recently about the problems with cash, particularly in times of very low interest rates. He proposed using technology similar to Bitcoins, a totally electronic version of cash. Chief Economist Andy Haldane is quoted in the Financial Times:
...perhaps central bank money is ripe for its own great technological leap forward, prompted by the pressing demands of the zero lower bound [on interest rates] ... Highlighting the need for a government-backed electronic wallet, even if it no longer had the Queen’s head printed on notes or coins, he proposed a world without cash. “This would preserve the social convention of a state-issued unit of account and medium of exchange, albeit with currency now held in digital rather than physical wallets.
On Reddit and in comments on more plebeian British newspapers, everyone is going nuts, calling this "a very dangerous idea that would give banks and the government total control of our lives." The conspiracy theorists are out in force in comments on the Daily Express:
A very dangerous idea — it would give banks (and by extension, the government) total control over our lives. Step out of line and we could well find all our assets confiscated. Never mind a single European currency, it wouldn't be long before we had a single global currency, to go along with one world government, all manipulated by whoever holds the reins of power — corrupt politicians, bankers, multi-national corporates, unelected bureaucrats and "Bilderburgers" would be my guess.
Meanwhile, many conspiracy theorists worried about governments manipulating their money have already gone cashless and have started using Bitcoin, an electronic exchange system that is considered secure and safe to use, since every transaction is encrypted and recorded on a special computer network known as a block chain. Even established companies like Goldman Sachs and Barclays bank are looking at this technology because, according to the CBC, it is "an effectively unhackable system that could introduce trust and transparency to any online transaction."
Personally, I think those who fear a cashless society are overreacting. First of all, how much cash does anyone have at any given time anyway? If right now your credit cards, debit cards and bank accounts were turned off in an "Enemy of the State" scenario — in the movie, Will Smith's bank accounts are emptied and his credit and debit cards deactivated — could you buy much more than a pumpkin spice latte? I think for most people these days, the answer is probably no. In Canada where I live, where we have one and two dollar coins, I often go weeks without touching a banknote. Without RFID tap credit cards, it's so easy to go without cash. I don't even need subway fare anymore; now I just tap a card.
In Scandinavia, cash is used in less than 6 percent of transactions. (In the U.S., it's still 47 percent). Most people use smartphone-based apps like MobilePay. In Sweden, according to CNN, you can even use it to buy those newspapers that homeless people sell. The Danish government is telling retailers that they don't need to take cash as of January 2016 to reduce handling and transport costs as well as to control theft. For now they will still accept cash at pharmacies and post offices, but for how long?
A cashless society is "no longer an illusion but a vision that can be fulfilled within a reasonable time frame," said Michael Busk-Jepsen, executive director of the Danish Bankers Association.
Most people are already using online banking, credit and debit cards and even newer systems like Apple Pay to get close to cashless now. Really, unless you're a doomsday prepper with a big jar of twenties buried in the woods somewhere, we're pretty much already there.