The world is drowning in cash – and it’s making us poorer and less safe.
Even as people are using less paper money, the amount of cash in circulation is reaching record levels worldwide. Why? The answer is simple: a large part is feeding tax evasion, corruption, terrorism, the drug trade, human trafficking and the global underground economy.
Paper money can also cripple monetary policy – in the aftermath of the financial crisis, central banks have been unable to stimulate growth by cutting interest rates for fear it might drive investors to abandon treasury bills and stockpile cash.
The solution, argues Kenneth Rogoff, professor of public policy at Harvard University and former chief economist of the IMF, is to scale back paper money.