The central banks don’t like that cash makes it hard to cut rates to below zero. 0% is pretty much as far as they can go (though there are exceptions such as in Denmark.) Boomberg reports;
In a new piece, Citi’s Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates.Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?
Cash therefore gives people an easy and effective way of avoiding negative nominal rates.
See this is a problem for the central bankers who want to be able to charge people and other entities for holding money. They want to erode your savings, pay, etc. (even more quickly) to “stimulate” the economy. Cash makes this hard to do because it pays 0% which is better than the -.5% or whatever the bankers want.
This is the fiat money system in serious trouble.
On the non-institutional level, the economic level on which most of us operate, the implications of a no cash world would be profound. No anonymity. Every transaction traceable. Bitcoin becomes much more important if the authorities don’t seek to ban that too. (Which they likely would.) Cash becomes contraband. Not smart.