A glimpse into the near future reveals that the concept of money as we now know it will be radically altered. The privatization of money is occurring not so much as the result of explicit governmental privatization efforts, but because technological advances are forcing it. Technological advances in electronic banking and commerce threaten to all but replace the existing system of paper currency. They ultimately will revolutionize the manner in which monetary exchange transactions are conducted by individuals and financial institutions. And, consequently, they will enhance privatization at the expense of governmental financial and tax systems.
Tangible money is useful only as a means to facilitate trade and investment.
New technologies will enable people to acquire goods without handling cash, a troublesome, non-earning asset. In the future, trade will be executed by instantaneous and simultaneous debiting and crediting to and from liquid wealth accounts, held by both banking and nonbanking institutions. Electronic digital payments technology will enable property rights claims on real assets, such as stock and bond funds, or gold, to be utilized as the medium of exchange for virtually all transactions. The instruction will state that an amount equal to the nominal value of the purchase should be transferred immediately to the account of the seller of the good or service. Accordingly, there will be no loss of interest earned, nor will there be any need for a traditional wholesale interbank clearing system.