Digital Cash?

In this paper, the possible consequences of digital cash from the viewpoint of economics are discussed and a possible scenario for the future is forecast.

Digital cash will bring us benefits as well as problems. One major benefit of digital cash is its increased efficiency, which will open new business opportunities, especially for small businesses. On the other hand, it will bring us four problems: taxation and money laundering, instability of the foreign exchange rate, disturbance of money supply, and the possibility of financial crisis.

There is one important attribute of digital cash, however, that overshadows these benefits and problems. It is the transnationality of digital cash--the ability of digital cash to flow freely across national borders. Every bank can issue it, and everybody all over the world can use it. This transnationality is a cause for both benefits and problems and could have significant repercussions internationally. From the economic standpoint, the most important characteristic of digital cash is its transnationality. If digital cash circulated only within a traditional national border and was controlled under a central monetary authority, there would be no economic implications that would be worth analyzing. In this case, digital cash would be nothing more than a convenient transaction method such as a credit card.

However, digital cash is more than that. Its transnationality has the potential to cause conflict between cyberspace and nation-states. If digital cash spreads successfully in the 21st century, its history may be written as a record of its battle with nation-states.by Tatsuo Tanaka.

Do you think we will see completely digital cash system in our lifetimes? Or is it just not viable?

Re: Digital Cash?

Mmm not sure counting digital cash will have the same excitement as emptying out the piggy bank and counting the contents ...

Re: Digital Cash?

Yes I know meg,doesnt have the same feeling attached to it does it.?


Save the "Piggies" I say!!!

Re: Digital Cash?

Surely digital money already exists doesn't it?!

Bitcoins have been around for some time now and raised some of the concerns in the article.

Aside from that the money that you think exists in your bank account is equally just digital money. It is vapourware. It doesn't exist physically.

Furthermore, all of the bank notes sitting in your wallet are pretty worthless being as they are nothing more than bits of paper (well actually linen!). That you or someone else places any value on those notes over and above the paper value is purely a temporary situation and one which could collapse overnight. Were those bank notes underpinned by actual gold sitting in a vault somewhere then they would have true value, but the powers that be removed the link between notes and gold a long time ago.

A financial collapse is absolutely inevitable regardless of which format of money is used and while ever that money is not underpinned by a real asset.