...than when I write about the future of money, a research report from a "large" (read: Federally Subsized and partially owned) money-center bank includes the below remarks that may as well substitute as a trial balloon for discussion regarding the "need" for actual cash. That the following assumes a different role for government than The Constitution envisioned is, well, just read it carefully and think through the implications.
In a modern, financially developed economy, like the four currency areas under
consideration here, the costs of abolishing the ELB, if achieved by moving to a
cashless society with E-money only, consists mainly in the loss of seigniorage
income to the central bank and the loss of anonymity provided by banknotes to
those holding their wealth in currency and conduction transactions with it. There
undoubtedly are legitimate reasons for households and businesses to wish to
preserve anonymity in their financial dealings. There also can be little doubt,
however, that some of the main beneficiaries of the existence of state-issued bearer
bonds of the highest liquidity – instruments that are generally accepted as medium
of exchange and means of payment, often with the imprimatur of legal tender status
- are the grey, underground and black economies. The state provision of currency
can therefore inadvertently subsidise those engaged in such illegal activities as
money laundering, tax evasion and funding terrorism and other criminal activities at
home and abroad. It would, in our view, be worth getting rid of currency, regardless
of the ELB issue.