The Royal Canadian Mint's latest currency idea isn't just commemorative Royal Jubilee or Titanic coins or sticking dinosaur pictures on quarters The mint wants to go digital with a program called Mint Chip, which is, according to its YouTube video (which you can watch below this article) "the evolution of currency" and "currency in its digital form." By using a digital microchip, you can do your banking and buy things with your tablet computer or smartphone, instead of with cash. Add that to the recent announcement by the federal government that we are saying good-bye to the penny, and it may seem that Canada is well on its way to becoming a cash-free society, a move that David Wolman, a contributing eidtor at Wired and the author of The End of Money: Counterfeiters, Preachers, Techies and Dreamers -- and the Coming Cashless Society, fully supports.
Wolman chose to live without physical cash for an entire year, then began to research what a future without physical cash would look like. Wolman discovered that a cash-free economy is an enticing one.
Well, at least for him. Wolman hates physical cash for several reasons. "For starters, it's filthy, coated with cocaine residue and all kinds of microscopic goodies," he said to Day 6 host Brent Bambury in a recent interview. "But the other reason is, it's expensive, actually much more expensive than anyone stops to think about. It seems so fast and straightforward and easy and cheap. It's actually none of those things. Cash costs a lot of money at the personal level and at the social level."
Wolman breaks down the cost of cash into two levels: the costs associated with the actual creation and maintenance of currency, the " transporting it, inspecting it, counting it and securing it and recounting it then shipping it off to a bank" and the unanticipated costs associated with supporting physical cash. "Paper money is the currency of crime," Wolman says. Drug deals, prostitution and tax evasion are all industries that thrive on physical cash. Wolman argues that taxpayers end up paying higher taxes to offset those that tax evaders avoid, and taxpayers also fund the policing and investigation of the illegal activities conducted in cash. This is a big problem, and one Wolman thinks could be better dealt with if there was no paper money through which to complete transactions.
Wolman is an American who currently lives in Portland, Oregon, but the recent money-related developments in Canada appeal greatly to him. "I've been celebrating this news," he said. "It seems like they are on an innovation tear north of the border." He also argues that such a move proves just how insignificant paper money is becoming in today's economy. "It's quite telling that you have the central bank, or a wing of the central bank, telling the people that cash in physical form is sub-optimal and we're going to help usher in the future of money with this new digital currency."
Wolman understands the reluctance to make such moves, however. His book resulted in several passionate emails advocating for physical money. "Even though we know intellectually that the paper money has no value, the tactile experience of transacting with it really registers for people," he admitted. However, he's confident that with time, and with more options that people understand and are comfortable with, paper money will indeed become a thing of the past.
After all, "the fact that a banknote hold value is just an abstraction, it's just an idea. Because money itself is an idea."