As central planners the world over grapple with the effective “lower bound” that’s imposed by the existence of physical banknotes, there’s been no shortage of calls for a ban on cash.
Put simply, if you eliminate physical currency, you also eliminate the idea of a floor for depo rates.
After all, if people can’t withdraw paper money and stash it under the mattress, then interest rates can be as negative as the government wants them to be in order to “encourage” consumption. If, for instance, you’re being charged 10% for saving your money, then by God you will probably spend that money rather than see the bank collect a double-digit fee just for holding on to your paycheck.
http://www.zerohedge.com/news/2015-11-05/bank-ireland-bans-small-cash-withdrawals-branches
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