Preparing For A World Without Cash

• Preparing For A World Without Cash
  by Tyler Durden, www.zerohedge.com  
  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…  
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  “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!”
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  Raskin and Yermack begin: The Federal Reserve has done almost nothing to study how a digital currency might work…
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  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.
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  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.
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