The appeal of a cashless society is a popular topic among economists, and now there is one factor that will put a tick in its favor. The increasingly common, though equally controversial policy of capital controls.
According to private intelligence agency Stratfor, a global economy running without physical cash will make it much easier for governments to control capital flow. The report comes as the European Union considers eliminating the €500 note, saying it encourages cash hoarding rather than spending.
“The ease with which governments can track and control electronic money makes it harder for citizens to hide capital or to misrepresent their income,” the authors wrote. “Now that there is a global push to end tax evasion, a cashless system becomes all the more appealing.”