Deutsche Bank—"Cash, freedom and crime: Use and impact of cash in a world going digital"

From Deutsche Bank Research, November, 2016:

With the growing use of electronic payments, the need for physical cash is no longer self - evident. Indeed, cash has come under scrutiny for reasons of monetary policy, law enforcement and efficiency.

Although cash - related evidence is scarce , facts rather than emotions should found the debate on the future of physical cash. Demand for euro cash is on the rise. Euro cash in circulation grew to EUR 1.1 trillion by Q3 2016, three times as much as in 2003. Also, cash grew faster than GDP at current prices.

In the field of monetary policy, physical cash can be a crude instrument in anyone ’s hands. If bank deposits are withdrawn in cash on a large scale , financial institutions and monetary authorities can be pushed to the limits of their power. Abolishing cash will not eliminate profit - driven crime.

Alternative ways of transfer ring the proceeds from illegal activities can substitute cash , albeit at higher transaction costs. Payments go digital and fraud follows: An (almost) cashless Sweden sees card fraud rising. However, the general safety of both cash and cashless transactions in Europe is high.

Cash provides data protection and can therefore act as a guarantor of civil liberties in the event of an administration abusing its powers . The abolition of physical cash may be regarded as an attempt to tighten control over citizens. Trust in public authorities would erode....

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