Quote:
Originally Posted by vid
With electronic money becoming more popular, we're getting near to a point where currency exchange will be unnecessary. Everyone will use debit cards and the conversions will be done at point of purchase by a computer. 100 years from now, hard money will be a thing of the past.
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Hard money will never be a thing of the past if for no reason other than the fact that all things electronic are incredibly traceable. Hard cash is relatively untraceable and there will always be a use for it.
That said, hard money is already a thing of the past for many people. I hardly ever cary any cash, and I don't think many people in my age group (young 20s) or younger carry cash very often. The only times I do go out of my way to carry cash are places where credit/debit cards aren't accepted or carry high fees, like sporting events or travelling in foreign countries. Just because conversion can be done at the point of sale does not mean it will be cheap (1% for Visa users adds up). Enough people will be willing to pay these charges that banks will continue to make money and will continue to charge fees for currency conversion, but there will also be enough cheapskates like me to keep hard currency around.
Finally, cash and currency are 2 very different concepts. Just because you don't carry physical dollars or euros or yen does not mean that they won't continue to exist electronically as dollars or euros or yen. If your checking account is in dollars and you buy something in pesos with a debit card, currency exchange is still happening, you just aren't seeing it or necessarily aware of it.
Having the same currency is convenient for individuals, but it is not always convenient for governments (which decide which currency to use). The world used to be on a de facto standard currency (gold). Different governments still had their own currencies, sure, but paper notes were all intended as mere representations of gold. Dollars were actually redeemable for gold in banks for a good part of the US's history. The US dollar was officially convertible into gold all the way up to 1971 (other countries followed the US's lead soon after). The problem with a universal currency... or any currency that is larger than the national boundaries... is that it hamstring's the national governments ability to use monetary policy as a tool. Most governments are too nationalistic to give up that tool.
The EU nations have surrendered large parts of their sovereignty, including monetary policy, which works for them. No matter how logical it may be for the US, we Americans are simply too obsessed with our own sovereignty and our own independance to ever voluntarily surrender that much power to a higher organization. At least not in any of our or any of our grandchildren's lifetimes or without an alien invasion to bring us all together.