Preparing For A World Without Cash

Tyler Durden's picture

The Wall Street Journal has published an Op-Ed - authored by two NYU professors: Max Raskin and David Yermack - on the subject of the digitalization of currency. The strawman offers several pros and cons to a 'world without cash' but before we start, one commenter summed up our own skepticism...

"Given the fact that the trust in The Fed is at the level of Clinton; why is there any discussion regarding providing them any additional powers? Look at the deplorable track record of these clueless bureaucrats!"

Raskin and Yermack begin: The Federal Reserve has done almost nothing to study how a digital currency might work...

Central bankers throughout the world, from Canada to Ireland, have recently indicated that they might issue digital currency in the future. Yet the U.S. has been absent from the debate. As the world’s central monetary power, America should play a leading role in studying the benefits and pitfalls of a digital-currency future. While plenty of risks would come with such a conversion, the potential perks are so great that it merits serious consideration.

What would a government-backed digital currency look like? A country’s central bank would need to become a deposit-taking institution and hold accounts on behalf of citizens and businesses. All of their debits would be tracked on the central bank’s blockchain, a digital ledger resistant to tampering. The central bank would pay interest electronically by adjusting the balances of depositor accounts. While the current system of physical notes and bills could be continued in parallel, it would likely wind down over time.

Though such a system seems relatively simple, implementation wouldn’t be easy. In “Digital Currencies, Decentralized Ledgers, and the Future of Central Banking,” a new paper prepared for a forthcoming research anthology on central banking, we analyze potential costs and benefits of a sovereign digital currency.

There are plenty of advantages. The government would save nearly $1 billion annually by not having to print, store, transport and safeguard physical currency. Tax collection would become much simpler, and tax evasion and money laundering could become prohibitively difficult. Depositors would no longer have to rely on commercial banks to hold their checking accounts, and the government could get out of the risky deposit-insurance business. Commercial banks that wished to keep making loans would raise long-term capital in the debt and equity markets, ending the mismatch between demand deposits and long-term loans that can cause liquidity problems.

Central banks would be able to expand credit and control the monetary system without the need for commercial banks to intermediate. The central bank could more easily adjust its monetary policy, because it would have the ability to target specific accounts. For example, the Fed could loosen monetary policy only in economically depressed regions of the country, or for certain depositors, such as senior citizens.

Yet the centralization of banking under this system would also create a Leviathan with the power to monitor and control the personal finances of every citizen in the country. This is one of the chief reasons why many are loath to give up on hard currency. With digital money, the government could view any financial transaction and obtain a flow of information about personal spending that could be used against an individual in a whole host of scenarios. In other words, it would be virtually impossible to hide money under your mattress. But creating and respecting privacy firewalls and rethinking legal-tender laws could mitigate the dangers of monopoly and stifled competition in currency markets.

Implementation would probably create the toughest problems. Today bitcoin and other digital currencies are mostly used by relatively affluent men between the ages of 19 and 44. Not all citizens would be comfortable switching to a virtual currency, and the poor and computer-illiterate would be most vulnerable to being left behind. To accommodate these users, the U.S. Mint could place a digital token in each newly issued dollar bill, with a cryptographic key embedded in a hologram to enable digital tracking on the central bank’s blockchain. Such physical manifestations of digital currency already exist in the bitcoin market and would allow individuals to participate in a scheme of digital currency without having to change their behavior.

However, a transition to digital currency might come at a large cost for the U.S. in particular, because the dollar remains the world’s de facto reserve currency. The U.S. collects enormous seigniorage revenue that accrues to the economy when the Federal Reserve prints dollars that are exported abroad in exchange for foreign goods and services. These bank notes ultimately end up in countries with less reliable central banks where locals prefer to hold U.S. currency instead of their own. Forfeiting this franchise as the world’s reserve currency might be too costly, as the U.S. currency held abroad exceeds half a trillion dollars, according to reliable estimates. Unless it is prepared to take deposits from people all over the world who are looking for safe havens, the Fed might sit on the sidelines and watch other countries take the lead in replacing their physical money with digital.

Despite its shortcomings, would this system make sense for the U.S.? With less physical currency being used every year, the Federal Reserve would be negligent not to consider the possibilities. The march of digital commerce may eventually make the benefits seem overwhelming, and it would be wise to be ahead of the game rather than trying to catch up at the last minute.

*  *  *

So, while carefully worded, it seems the authors recognize that digital dollars are an asset only to heightened Federal government tyranny... and yet believe this idea should be pursued?

At the rate that American taxpayer cash is heading to Tehran, perhaps a shift to a digital currency does make sense?

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peddling-fiction's picture

Revelation 13:16-17, “He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name.”

InsaneBane's picture

The modern man always uses paper..when it comes to wiping his ass with it.

localsavage's picture

It is all about how hard it is for them to fuck you over.  When there is no cash, I would look at my money as being in cooperation with .gov.  It is your until they decide that it isn't with a keystroke.  With cash, it is your until they come and physically take it.

InsaneBane's picture

They own your ass if you have a SSN, they even trade it on Wall is your until they come and physically take you.

Stuck on Zero's picture

I see some major advantages to the all digital government currency. As the value of the currency goes to zero there would be no need for wheelbarrows and giant printing presses.  Just add zeroes. So saying, my suggestion is that the government allow at least 256 bit integers for all currency transactions.

de3de8's picture

So long as Ag and Au still work

Boris Alatovkrap's picture

Maybe you are forget Cu, and of course, when all else is fail, Pb.

Boris Alatovkrap's picture

Okay, Boris is finally read article (sometime Boris is rush to jump in comment section, because of too many wording in article).

So article is propose yet more fiat currency, but in pure digital form, entirely digital bank ledger and all transaction by digital.

The key to currency is not most convenient form, is base upon credibility of currency, and most important, future value of transactional currency. You are not accept Zimbabwe dollar for dollar if you are believe is tomorrow not worth so much. You are not accept token if you are not believe in future value. Good example is Susan B Anthony dollar coin, mint 1979-1981, which Amerikansky is not so much receive, so it is never become official currency.

Both Bankster and politician is know this, so much careful make tread. Maybe Boris is wrong, but is think Amerikansky is reject digital currency as full replacement of physical token. Of course, boil frog is not complain, so maybe day is come.

ACES FULL's picture

Max Raskin and David Yermack...sounds like a couple of nice Amish boys.

TahoeBilly2012's picture

"boiled frog is not complain"...yessir, Big Brother will now see ALL, just like the US Dollar seeing eye shows. All transactions will either be approved or disapproved (with the later being suject to investigation). If you are deemed a "domestic terrorist" expect to see many rejected transactions.

Al Bendova's picture

Well,  the government can't have people just doing what they want with their own money.  Think of the "unfairness" that might creep into the system.

InsaneBane's picture

Well they have a technology leap of at least 30 be my guest.

Boris Alatovkrap's picture

Boris is recommend 128 bit integer to allow negative set, or at least 255 bit integer with sign bit.

InsaneBane's picture

I don't care's all yours..let the usefull idiots perish into thin air.

MalteseFalcon's picture

No cash = no $

No $ = no empire.

What do you think Obama is going to send to make his next ransom payment to Iran? 

A pallet full of bitcoins?

Wise up!

InsaneBane's picture

The empire always morphs into a novus ordo..history is on my side unfortunately.

swmnguy's picture

It would be a lot harder to run drug and weapon smuggling operations, fund terrorism and covert ops, etc., without cash.

willwork4food's picture

Which means silver & gold & food will become more valuable.

adanata's picture


Don't worry about it, it's never gonna happen. People won't stand for it. If they try, you will be able to see the blowback from space.

InsaneBane's picture

Which generation? Not the zombies that walk on the street, heads down chasing ghosts on a screen.

cynicalskeptic's picture

hell... anyone under 40 doesn't even CARRY cash most of the time.   They'd be lost woithout their debit and credit cards.

FX223's picture

I use cash almost exclusively...always have enough around to survive longer them my neighbors in the event of a "bank holiday" power outage "system is down" kind of event.

I never miss an opertunity to scold anyone in line at the coffee shop on days when the credit machine is remind them loud and clear that cash = freedom and how dare you not have a buck fifty in your pocket to buy a God damn cup of coffee...really!!!!

Fucking people are already zombies...not even God can help them when we all get Venezuela'd.


InsaneBane's picture

Save your own temple..we are past the phase of's time for understanding.

bobdog54's picture

"Venezuela'd" - perfect 223!

adanata's picture


You have a point... I keep forgetting the under thirty crowd is living in a world of illusion. However, I have hope the majority; not just in the U.S. but across the world, have sufficient common sense to defend themselves. I think they do and I hope I'm right...

hxc's picture

Funny how people chide Christians for being Christian while revelations plays out.






Does anyone fucking get it yet?

InsaneBane's picture

Maybe they have a script to follow..Religion divided man

InsaneBane's picture

And Catholic Christendom (also Islam) is a part of it hiding iself behind a big lie leading billions of people to a cliff.

Zionism is an other vessle hiding itself behind so called Judaism manipulating reality

Joe Biden: ""I Am A Zionist. You Don't Have To A Jew To Be A Zionist"

peddling-fiction's picture

Add the Mormons (into transhumanism), Jehova´s Witnesses, Pentecostals and Evangelicals that sport Freem@sons as pastors.

Their flock know not that they belong to apostate gnostic churches.

They do most of gangstalking as well.

That fact is not an accident.

God does not like gangstalkers.

Repent and change your ways.


peddling-fiction's picture

I forgot to add the Unitarians and Baptists in the list above. Most churches are infiltrated to a degree, or founded by apostates.

Maybe some independent Evangelical churches are on the right path.

However, if they are on the right path, they and their pastor will be under attack.

They will not be popular in the community.

God bless and no fear.

<Veritas est en Deo>

InsaneBane's picture

Believe in Creator is something devine and personal and NOT something you establish by oppression!

sempiterno pacem

in4mayshun's picture

"Maybe some independent evangelical churches are on the right path."

You mean churches that celebrate pagan holidays, support man's illegitimate wars, water down Bible principles regarding fornication homosexuality and materialism, get involved in politics, and don't teach the Bible? You think "those" churches may be on the right path?

I wouldn't bet on it.

peddling-fiction's picture

+1 in4mayshun

I would not give them great odds of success, but I still wish them well.

The best way is on your lonesome and sharing what we are sharing.

Then through discernment comes knowing for sure.

The Bible needs to be old and Greek. Got a copy that has not been tampered with?

Still I have learned from many people and thank them greatly.

Grave's picture

atheism is not a religion dumbass

peddling-fiction's picture

You are right but his message is on the money.

The real religion of the nW0 is gnostic Kabbalism.

That is why the New Age was released.

To soften us up and make everything relative.

But particularly to destroy Christianity.

Now why would that be?

CPL's picture

Because they are stupid, inbred and crazy.  There's not much else to say about it.

peddling-fiction's picture

"There's not much else to say about it."

That would reflect the group think of Juic-e and K@bbalists or atheist´s they have indoctrinated.

Christianity is not the religion or going to church. It is the real Christian (few).

Being a Christian is to want to imitate and live like Jesus Christ (a tall order).

Also to be prepared to die like Jesus Christ.

And wanting to kill a "Christ" is wanting to imitate the Syn@gogue of S@tan (K@bbalists).

Grave's picture

this is the exploitation scheme run by zionazis for millenia (divide and conquer is one of the tools to control, exploit and abuse targeted societies):

cabal of abrahamic religions:

- control religion: judaism (basically just ripping off and plagiarizing various common sense ideas from older native religions, egyptian, cimmerian, babylonian, etc)
- branch 1: christianity (created from the same cesspool)
- branch 2: islam (created from the same cesspool, as opposition to keep christianity in check)

both branches are used to exterminate native religions all over the world, and brainwash populations into mental slavery

both are then used to create perpetual conflicts, wars, genocides, etc to steal the resources from native productive population, and to keep either one of them from rising against the control religion.

peddling-fiction's picture

I will not defend religion per se, but Jesus Christ is another story.

Seeking to imitate or follow Jesus Christ is what makes a real Christian.

Take a look at this video mocking the crucifiction of Jesus on Isr@el-i TV.

As an added bonus, the mocker is serious eye-candy, and dressed meagerly. ;-)

The Juice hate Jesus Christ. Should they not ignore instead of show their contempt?

Or is there more to this truth?


Grave's picture

watered down version of the mythological story of egyptian god horus, his mother isis, etc
(which itself is copied from even older sources)
notice "similarities", i'm not going to connect the dots for you :p

peddling-fiction's picture

You think that Horus, Isis and Osiris are stories and only myth?

The elite worship these deities with great fervor to this date.

Looks like you have been indoctrinated by this elite to not believe in anything spiritual, and actually believe that being atheist makes you smart or rational. The educational system has done its degenerative job very well.

The joke is on you. Hopefully you have an epiphany.

Grave's picture

i'm not an atheist, i'm non-religious

connotations of the word atheist has been turned negative by religious zealots who see it as an attack on religion with the meaning of anti-theist, and not its real meaning of simply describing a non-theist

"As a Christian, you've denied all other gods save one. I just go one God further"

anyway this is the last thing i'll write on this subject, its pointless to try discussion with fanatics.
the knowledge is out there on the internet, one just has to look for it if one wants to learn.

peddling-fiction's picture

Somebody has to tell ya.

Might as well be me.

atheist = non-religious (if you do not believe in a deity)

"Atheism is contrasted with Theism":

If you believe in a deity (but not God) we can call you a Pagan.

Being slick with words does not get you off the hook.

I am simply being objective and informing you.

Normalcy Bias's picture

There are many atheists who are apparently unaware that their beliefs aren't a religion.

Without question, they've been THE most obnoxious proselytizers I've ever run across.

Kirk2NCC1701's picture

Clearly you don't know the difference between Causality and Inspiration*.

* A 'What To Do' guide. Which makes it SELF-Fulfilling.

ZHers have commented many times on the books '1984' and 'Brave New World' being used as "How To Manuals", rather than as the Warnings that they were intended to be -- if future generations stay on the prevailing trajectory.

Hedgeless Horseman posted several times what the many types of False Arguments are.  Yours is a fine example of one of them, but you've been busted -- no matter how many Kool-Aid drinkers up-vote you.  Their votes only show how many shoddy thinkers are in the ZH ranks.

peddling-fiction's picture

Kirk: Maybe you just got busted and are showing your true essence. You seem to ignore that there has been a hidden hand and long term planning (think centuries), without mentioning pervasive mind control that is manipulating people towards their planned goals.