Making Monetary System Electronic

“For hundreds of years, the monetary system of most countries has been based on the exchange of metal coins and printed pieces of paper. However, because of recent developments in technology, the international community should consider replacing the entire system of coins and paper with a system of electronic accounts of credits and debits.”

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

Theoretically, electronic accounts sounds like a reasonably good idea to me. Till the time electronic money is backed by Gold reserves and foreign exchange reserves, its credibility is no less than paper and metal based currency system. Such a step would be environment friendly as it would save enormous amount of paper and metal. With money safely encrypted in hard drives and not safes, it would also discourage criminals from committing petty thefts, robberies and pick-pocketing. It would also make transactions quicker, faster, safer, accurate and more reliable. Currency trading would also benefit from such a transition. Making stocks, bonds and other money-market instruments electronic has strengthened money markets the world over.  Hence it is not far-fetched or unreasonable to assume that actual money may take the same path. In fact credit cards and debit cards seem like miniature flag bearers of an era when money would become totally electronic. 

However the practical implementation of the same is still a distant reality. It is not that we simply need to raise the standards of e-security to neutralize threats from hackers in form of electronic thefts and data misuse. The basic problem is lack of development and technology in a big part of the world. The first world countries cannot exist in isolation and need to reach out to other developing countries too. In the end a system can be only as strong as its weakest link. With that perspective it can be really dangerous to suddenly turn the currency system electronic. Over time it is inevitable but is difficult to implement all over the world right now.

The last question is the amount of information that such a system can place in anybody's hand is very dangerous. The possibility of somebody being able to watch every financial transaction done anywhere on the planet is, somehow, not very comforting. Hence this system has to be backed by strong privacy laws to prevent Governments and corporations from covertly spying on people or each other. 

Concluding, I agree with the basic vision presented as it will work for the benefit of a large number of people. Similar revolution in money markets support the idea. However to implement it on the world level is difficult due to prevalent disparity in development. Such a system also needs to be put in check with strong laws to prevent blatant misuse.