Calling for the elimination of cash is no longer the truly radical position it once was, and the need to eliminate of the most dangerous types of bills is becoming conventional wisdom. Sands's paper argues that abolishing high denomination bills, such as the $100 bill and €500 note, would impose a sizable cost on criminals trafficking large amounts of money by making transportation much more difficult. Crooks can easily tote $1 million in $100 bills in a single briefcase, for instance; the cash weighs just 22 lbs. But in $20 bills, that same $1 million would weigh 110 lbs. and fill four briefcases—too much for one courier to handle.
Former Treasury Secretary (and fellow Harvard scholar) Larry Summers endorsed Sands's conclusions in a recent article for the Washington Post, although he stopped short of calling for an end to paper money entirely, and the Financial Times reported in February that the European Central bank will gradually withdraw the €500 note from circulation.
Getting rid of cash isn't just about disrupting major organized crime. It’s also about limiting day-to-day street violence. Professor Wright and his colleagues studied crime statistics in Missouri during its mid-1990s transition from distributing federal welfare benefits via a cashable check to a preloaded debit card. After comparing areas that transitioned to debit cards with those that still provided cash benefits, they found moving away from cash was associated with a roughly 10% drop in the total crime rate.
Wright says criminals generally commit burglaries, larcenies, and theft-related assaults in order to get their hands on money they can use in the illegal economy. "You can’t buy drugs with a debit card," the professor explains. In other words, crime declined because there was less of what thieves wanted to steal. The evidence for cash's role in crime is strong enough that Wright supports getting rid of paper money wholesale—assuming there can be safeguards to allow transactions in the event of a major internet outage. "Getting rid of cash won’t stop all of this [crime] but it will slow it significantly," he says.
Harvard economics professor Kenneth Rogoff also supports eliminating cash, not just to thwart underground economies, but also to help improve economic policy.