Unfortunately, the world's governments remain stuck in the past. To maintain our stock of hard currency, the US Treasury creates hundreds of billions of dollars worth of new bills and coins each year. And that ain't money for nothing: The cost to taxpayers in 2008 alone was $848 million, more than two-thirds of which was spent minting coins that many people regard as a nuisance. (The process also used up more than 14,823 tons of zinc, 23,879 tons of copper, and 2,514 tons of nickel.) In an era when books, movies, music, and newsprint are transmuting from atoms to bits, money remains irritatingly analog. Physical currency is a bulky, germ-smeared, carbon-intensive, expensive medium of exchange. Let's dump it.
Markets are already moving that way. Between 2003 and 2006, noncash payments in the US increased 4.6 percent annually, while the percentage of payments made using checks dropped 13.2 percent. Two years ago, card-based payments exceeded paper-based ones—cash, checks, food stamps—for the first time. Nearly 15 percent of all US online commerce goes through PayPal. Smartcard technologies like EagleCash and FreedomPay allow military personnel and college students to ignore paper money, and the institutions that run dining halls and PXs save a bundle by not having to manage bills and coins or pay transaction fees for credit cards. Small communities from British Columbia to the British Isles are experimenting with alternative currencies that allow residents to swap work hours, food, or other assets of value.
But walled-garden economies are a long way from a fully cashless society. As Wired first noted 15 years ago, to rely exclusively on an emoney system, we need a ubiquitous and secure network of places where people can transact electronically, and that system has to be as convenient as—and more efficient than—cash. The infrastructure didn't exist back then. But today that network is in place. In fact, it's already in your pocket. "The cell phone is the best point-of-sale terminal ever," says Mark Pickens, a microfinance analyst with the Consultative Group to Assist the Poor. Mobile phone penetration is 50 percent worldwide, and mobile money programs already enable millions of people to receive money from or "flash" it to other people, banks, and merchants. An added convenience is that cell phones can easily calculate exchange rates among the myriad currencies at play in our world. Imagine someday paying for a beer with frequent flier miles.