Keeping cash as full legal tender, even with the availability of a cashless alternative makes sense, in the way keeping farming and defense manufacturing domestic makes sense, even with the availability of cheaper imported substitutes.
We should be having these conversations now, because the push for a cashless society is coming. Mobile payments may solve a real problem in say, Kenya, where rural people don't have bank accounts but do have phones.
There is no such rationale in the developed world, so you better believe the current crop of fintech startups (along with the usual PR push across media channels) will be coming up with frivolous reasons as to why cash is history, and we all join the 21st century by channeling our transactions through their solution so they can take their cut.
Should we have a totally digital and cashless monetary system? It seems to me that the internet infrastructure as a whole is quite fragile, and a few well placed nuclear bombs could cut Internet access to a country, and therefore kill their transactional capability too. Would that make them more vulnerable?
(With most of the banking system computerised, have we past this threshold already?)
What did they do during World War II? I’m guessing cash was still common and this wasn’t an issue...
Interested in everyone’s thoughts...