Andrew Haldane said one solution would be for the Bank of England to issue a state-backed digital currency based on bitcoin. Supporting this initiative would be a negative interest rate levied on paper currency relative to the digital currency, with these measures do you think there is more possibilities that sometime:
Paper money will be banned entirely?
How long do you think that happens?
would it work?
What security and privacy risks would it raise?
And how would public and privately issued monies interact?
Look, it costs a lot of money for the government to print and to take care of the paper money in any country. With their own, state Blockchain's these costs would be decreased a lot. We should expect that the governments and banks both will do this fairly quickly.
The thing that bothers me and that I am pretty sure will happen if these state blockchains come to existence is a level of control that a government can induce while operating one such system. Not just control, but surveillance, limiting how and when you will spend your money, etc..
This is much easier doable with the electronic money than with the cash money and I don't doubt that the governmental stupidity and greed will try to do something like this, which will essentially be the end of these decentralized blockchains altogether.
