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Comment by gd1 | Hacker News Reader

There's been a deluge of anti-cash articles post Davos, and it's no mystery as to why. Not because it helps to prevent crime, or is more convenient, or any of these other reasons. Simply because you can't implement negative interest rates in a deflation event if your citizens have access to cash.

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Banks want cash banned because they spend a lot of money handling it. Also a cashless economy where the banks own all the infrastructure is more opportunities for them to make money.

Basically we're setting up a system where private entities will be able to tax and control participation in the economy, and we're doing it without any sort of debate except over how annoying coins are. Personally I'm not very impressed.

Cash also makes bank account confiscation less profitable.

https://en.wikipedia.org/wiki/Capital_levy

I see this mentioned often, but it just isn't the case. In order to effectively implement negative interest rates, we will have to modify the exchange rate between physical cash and bank deposits to remove the incentive to hoard physical cash above the amounts needed for normal daily activity, but we will not need to ban it outright. This paper[0] from the International Monetary Fund explains in more detail the steps banks will take to implement the changes.

[0] http://www.imf.org/external/pubs/ft/wp/2015/wp15224.pdf

Whoa, the guys who wrote this paper should get treatment not dissimilar as people who helped design and build Nazi death camps.

People will just ditch banks and return to exchanging physical currency in their transactions. Why would you need electronic money if it incurs additional fees?

I agree about the motivation, partially. I think that reducing cash use in transactions is also of interest to regulators to make it more difficult for people to hide income from tax authorities, or to engage in illegal transactions. Some countries have already successfully implemented negative rates without banning cash, though they are certainly looking into it.

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