Bribery, tax evasion, money laundering, counterfeiting, corruption, even the finance of terrorism. These are among a long list of crimes enabled by the use of "cash." The attempt to crack down on these crimes is driving governments and a range of companies to pursue the potential of a cashless society.
"Cash plays a big role in crime. I think there's a reason cash is king," says Harvard economist Kenneth Rogoff, who has written extensively on the costs and benefits of phasing out paper currency. "Even though we have bitcoin, gold coins, uncut diamonds … you still find cash playing a major role [in crime], because it's basically government-licensed, anonymous currency. It has very high liquidity, low transaction costs. You can spend cash anywhere. All these other things, like you take gold coins to someone and they're actually a lot of trouble to verify."
Rogoff says because most people only use cash for small transactions, if $100 bills were eliminated, it could have a significant impact on crime and help boost tax revenue, by eliminating tax evasion, without most consumers noticing. "Getting rid of hundred-dollar bills and even fifties is hardly going to end crime, but [those bills] are a very convenient way to stash money, store money. It's a big cost in laundering operations," Rogoff says. "I don't think it's the only step to take, but it's a very light-handed one that I don't think would affect ordinary people."
India is going far beyond eliminating large bills and aims to replace credit cards with biometric payment systems by 2020. India has already taken biometric data of 1.1 billion people; those who gave it are eligible for a free debit card account. There's a range of different types of biometric data — eye, fingerprint, palm print, scans — Mastercard even has a "pay by selfie" app.