Seriously, No More Cash in 2012

It turns out that 2012 is a kind of magnet for apocalyptic thinking. Justin Wolfers has predicted that the name Cash, currently riding a wave of popularity, will largely disappear by that date. Will actual cash — currency, greenbacks, dineros — survive much longer? David Wolman is the latest in a long line of people hoping the answer is no. While we’ve argued for ditching the penny, Wolman writes in praise of abolishing physical money altogether, in favor of a streamlined, emoney future. The technological solutions, he says, are in place. The policy solutions are, we think, another matter. [%comments]

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  1. JCA says:

    No Way! I am using more cash these days…I can’t trust gas stations to have safe card readers.

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  2. Paul Franceus says:

    The ability to spend anonymously is very important. And not just for illegal purposes. Do we really want a record of everything we do with our financial lives?

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  3. Nicholai says:

    @Paul:

    You can have anonymous, electronic funds transfer. Back in 2001 when I lived in Belgium there was an electronic purse card called Proton. Many countries have something similar, where value is stored on the card, not in a banking system.

    You could also buy high-value prepaid debit or credit cards to make anonymous purchases.

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  4. noe says:

    the ability to spend anonymously will probably still find a way to exist, even with the disappearance of cash. it’s just a matter of finding another currency that has a value. for example, if you wanted to buy some illegal drugs from someone in a cashless society, what’s to stop you from just buying a $50 Amex Gift Card and trading it for the drugs?

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  5. bb says:

    Will the homeless start carrying eMoney readers?

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  6. Quill says:

    So, when the power goes out we don’t get to buy groceries?

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  7. Brian says:

    Not a fan. There would be an unintended consequence of creating a new class of “untouchables” – people who can’t get onto “the system” in order to use e-money.

    Also, cash has a quality that digital funds never can. It’s a “bearer instrument”, which is something that we actually need for the economy to function. If you can never hold money in your hand, you’re excluding a surprisingly large segment of the population from potential productivity. I’d estimate that if the US cut over to digital-only transactions, it would cut the US GDP right about in half, give or take. You’d be surprised.

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  8. Grant says:

    I try to use cash as much as possible and my cards as little as possible. Not only for tracking purposes, but for self-control. Let’s say I’m at a bar. I start the night with $60. Once that 60 is gone that’s a good sign it’s time to pack it in. I’ve spent enough money. If I’m running a tab on a credit or debit card I can just keep spending and spending.

    But also, anonymity. Plus, cash is still faster for small transactions. Rather than waiting for my card to be approved when buying coffee on the street I can just hand the guy exact change and move on. And that’s not even considering the high fees charged by card companies. I don’t want to pay extra money for small things just so we can get rid of cash.

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