Chinese cashiers count one yuan banknotes at a public transportation office in the city of Yichang, central China (photo: dpa)

Cash is no longer king as fiscal and monetary interests converge

Will banknotes and coins soon disappear? Modern technology and private convenience support this trend, but monetary policy and political coercion play a less innocuous role. A ‘war on cash’ is underway that aims at enforcing negative interest rates on private savings, expropriating savers for the sake of a demand-driven stimulus. Governments favour cashless transactions because their transparency makes it harder to evade taxes.

The hoarding and use of cash has become a concern for economists and finance ministers. They present three arguments against the cash economy: (1) the inconvenience of using and holding cash; (2) the difficulty of tracing cash based illegal transactions, and (3...

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Dr. Michael Wohlgemuth
Cash presents a natural barrier to central banks’ ability to push nominal interest rates much below zero
read more about it in the report
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