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Digital Cash and Policy Authorities (4)Filed Under: General

d) Problem of taxation
Tax evasion and trends toward tax cutting would lead to a decrease in revenue. e) Restrictions and supervisory problems Via the Internet, money is easily transferred to and deposited in financial institutions
overseas, especially into those countries having few or no regulatory controls. This risks creating the domino effect of currency contagion and transferring some of the corruptive influences of the recipient country to the originating country. Restriction and supervision of such transactions is virtually impossible
without the countries’ mutual cooperation. Moreover, the individual scope of the financial institutions poses their own problems, since financial systems differ among countries. The problem of the scope of deposit insurance is present as well.

f) Problem of cash laundering, etc.
Government intervention regarding code keys and other transaction aspects may arise. Wanting to adopt such measures is natural for the authorities, but in conflict with the issue of personal privacy (Mester, 2000). Finally, the authorities lose profit, because cash (not digital cash) is a debt with no interest and the authorities acquire interest from assets. Or the substitution of privately issued digital cash for government-issued currency reduces seignorage8. But the pursuit of profit is not their objective, nor is it the goal of the central bank, as the ECB says.

Taken From: 10 Minute Guide to Conducting a Job Interview