In a speech to the Northern Ireland chamber of commerce, Andy Haldane, chief economist at BOE, said ending cash would help the bank to manage inflation by enabling it to bypass the current constraint against lowering rates below zero, reports FT.
Abolishing cash would remove the option for individuals to remove money from banks, if it ever instituted negative interest rates, he said.
He continued “perhaps central bank money is ripe for its own great technological leap forward, prompted by the pressing demands of the zero lower bound [on interest rates]”.
Halande is also thinking global. FT writes:
Highlighting the need for a government-backed electronic wallet, even if it no longer had the Queen’s head printed on notes or coins, he proposed a world without cash. “This would preserve the social convention of a state-issued unit of account and medium of exchange, albeit with currency now held in digital rather than physical wallets,” he said.In addition to Halande, FT has recently called for the abolishment of cash, as has Citi Group's top economist, Willem Buiter. And Bill Gates has dissed cash.