Lest this look like a bonanza for the government, they would pay as well. Currently the government benefits from the seigniorage from money creation. It doesn’t cost $100 to print a hundred dollar bill, so the government “earns” the difference between the printing cost and the face value of the currency.
Despite some apparent arguments for eliminating cash, it doesn’t seem very likely in the near future, if for no other reason that it would be unpopular and difficult to accomplish.
This article was written by David Blitzer, chairman of the index committee, S&P Dow Jones Indices.
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