Andrew Haldane said one solution would be for the Bank of England to issue a state-backed digital currency based on bitcoin. Supporting this initiative would be a negative interest rate levied on paper currency relative to the digital currency, with these measures do you think there is more possibilities that sometime:
Paper money will be banned entirely?
How long do you think that happens?
would it work?
What security and privacy risks would it raise?
And how would public and privately issued monies interact?
Over the years, we have progressed from a cash-only to a hybrid-based system, transacting in both cash and some form of electronic payment. Today, an increasing proportion of payments are made electronically and the current technological revolution playing out in the payments space is only increasing our ability to live without cash on a day to day basis.
So, are we likely to see the end of paper money anytime soon? No; not for the foreseeable future.
Apart from the necessary and significant investment in systems infrastructure, before even considering such an extreme policy, the political complexity of getting such a system set-up is overwhelming. If we consider the global monetary system, a cashless society would likely require international agreement and likely some regulatory authority to manage the global system. In a world where political compromise is increasingly rare, and where the vast majority of transactions in emerging markets are conducted via cash, it seems unlikely an international accord will be struck any time soon.