Many countries, like India, Belgium, and Australia are charting a course to remove as much cash out of circulation as possible. Sweden, in fact, has made it their goal to become the first completely cashless country, instead relying solely on “digital” currencies.
While there are some obvious concerns about individual privacy regarding one’s economic transactions, a completely digital marketplace does solve many problems.
- Every country has a cash-only shadow economy that pays no taxes and leaves no paper trail. A completely digital currency will force these tax evaders to pay their fair share, just like everyone in the traditional economy.
- A Tufts University report stated that the United States loses approximately $101 billion dollars a year in tax revenue from the non-tax-paying shadow economy of cash.
- The United States spent $726.6 million dollars in 2017 alone to create all of the various pennies, nickels, dimes, and other currencies required to keep the economic engines running. A digital currency would do away with this massive expense.
- A succinct digital confirmation of every single financial transaction will be a huge benefit to law enforcement and regulatory authorities when it comes to battling illegal activities such as bribery, extortion, illegal drug purchases, prostitution, money laundering, and other illicit activities that have a high price to the rest of society.
- Ultimately, shifting to a cashless society should result in a leveling of the playing field between people who play by the rules versus those who don’t.
While solving many problems, rest assured, the Law of Unintended Consequences will create an entirely new set of problems as countries move to digital currencies. As a society, we will need to be ever vigilant about the potential abuse of such a powerful tool as the complete and absolute paper trail of our every single financial transaction.