De-cashing as seen by someone at the IMF


#1

I think the author of the IMF paper got some things wrong. There is a link to the paper at this site which talks about the subject

http://norberthaering.de/en/32-english/news/808-imf-anti-cash-guidelines

Some quotes and comments below

The original paper author says:
The paper is not meant to take a view in favor of or against de-cashing in the ongoing debate
but it is clearly for it.

Also
Such banknotes (US$ 50 to US$100 in the United States, €50 to 500 in the Eurozone, ¥ 5,000 to 10,000 in Japan, and Kr 500 to 1,000 in Sweden) represent 80-90 percent of currency in circulation, though are rarely used in daily cash payments

I don’t know about others but I’ve often used $100 bills when I have them. It was rare maybe 5 years ago but you basically can’t even buy basic groceries for less than $100 now.

Large denomination banknotes pose institutional risks. First, they are an important vehicle for money laundering.
Most money laundering is not even done this way any more. It’s done through shell corporations. Does anyone reasonably think that eliminating the $100 bill would crush the drug trade or terrorism?

Second, payments with currency are anonymous, which makes them a popular vehicle for abuse, tax avoidance, terrorism financing, and money laundering. Transferrable deposits are personified and generally cannot be used for these purposes
The fact he seems to be saying the eliminating cash would stop all of these things is staggering. And again money laundering is not done so much with cash anyways.

In particular, the negative interest rate policy becomes a feasible option for monetary policy if savings in physical currency are discouraged and substantially reduced
i think this is the real reason for the banks to want to eliminate cash.

The only useful function of currency, which can be lost with de-cashing, is that demand for cash may help predict financial crises
The only useful function?

However, social implications of de-cashing can be substantial. Carrying cash is a human right and is written into constitutions, which therefore have to be changed.
No comment

Finally, should governments impose de-cashing without the general approval of the population, decashing may lead to social tensions, mistrust, walkouts, demonstrations, and, as a result, GDP losses.
Seems to imply it OK, for the the government to do things without approval of the general population


#2

Thanks for this review.
As you say, the goal of de-cashing is to have all of people’s money in a place where the banks and governments can control it.