In this world human civilization has reached the stars and now spans across multiple galaxies. Technological advancements such as neural implants, FTL travel, and FTL internet access are ubiquitous and even the poorest can afford them (provided by the government). In such a scenario where electronic payments can be made using just thought patterns what would the reason be for keeping physical currency such as coins as banknotes around (Why would a government issue physical currency)?

  • $\begingroup$ There is no reason. Right now, while human civilization is far from being capable of interstellar travel, some countries are seriously moving away from using physical currency. $\endgroup$ – AlexP Nov 28 '19 at 15:53
  • $\begingroup$ @AlexP There are lots of reasons. You can't get a population to accept complete digitization of currency unless that population has a very high level of trust in both the government and the banking system. We certainly don't have that in the United States, and aren't likely to anytime soon. $\endgroup$ – Morris The Cat Nov 28 '19 at 16:03
  • $\begingroup$ @MorrisTheCat: I wouldn't know about the U.S.A. But here in Europe the vast majority of people have not received their monthly pay in the form of physical pieces of paper since a long time ago, and very few people, if any, hold any significant amount of money in the form of physical pieces of paper. There are important uses for which physical pieces of paper are even no longer acceptable; renting a car or paying for a hotel room at a decent hotel, for example. $\endgroup$ – AlexP Nov 28 '19 at 16:09
  • $\begingroup$ @AlexP the pyschology is very different in the US. We still use PAPER CHECKS (cheques?) here. Not because there's any systemic limitation that requires them, but because too many Americans aren't willing to stop using them for banks and business to be comfortable eliminating them. $\endgroup$ – Morris The Cat Nov 28 '19 at 16:19
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    $\begingroup$ Heh heh. Gold pressed latinum. $\endgroup$ – puppetsock Nov 28 '19 at 16:27

Here are a few reasons:

  • Anonymity - anything "on the waves" can be tracked; cash is harder to track, especially if it's something valuable like silver (ie no number on it)
  • Sustainable Value - digital currencies are prone to rapid fluctuations in buying power; a dollar today will buy more than a dollar in the future (inflation). Any non-paper physical currency likely has real value (silver, gold, platinum) which sustains buying power over time. In fact, most millionaires have less than 20% of their wealth in the bank; they hold stocks, bonds, resources, property - things that hold value over time.
  • Distrust of Banks and Governments - Despite popular belief, when you put money into the bank, you no longer own it - the bank does. Most of the money you put into the bank does not stay there. If everyone ran into the bank today and demanded cash, they wouldn't have it on hand. If everyone tried to withdraw the money from the bank to another bank, that bank would collapse as they don't have that value - even digitally. Now the government could step in and allow the bank to simply increase the numbers on accounts, but that doesn't create more money, it inflates the value of the currency. So what do you do if you don't trust this system? Something you can hold on to.
  • Distrust Pt2 - the government can freeze or seize any money in any account in a matter of seconds. If you don't trust the government, you're going to either crypto currencies you control or... paper, coins, metals.
  • Prevention against theft and abuse - if you get my bank password, you get everything in my bank. If I buy cash, you have to physically show up to where I am to get it. Consider it an "emergency fund" - if something happens to your bank account, you want some backup.
  • Tax Evasion - anything on the wire is tracked, making it tough to cheat how much money you received. But anything in cash, or bartered, is not tracked, and you can thus evade paying taxes on that money.
  • Novelty and Collectors Items - The Amish are still a thing; some people will always press back against technological progress. Even Renaissance Fairs give places as temporary escapes; sometimes people want to live a simpler way - either temporarily or permanently. Or maybe they just really like coins. I remember as a kid trading baseball cards as a type of "currency" among friends. We had cash too, but there was a novelty in collecting a certain team, or getting certain stats. Sometimes people just like coins.
  • $\begingroup$ Anonymity/crime is the number one reason why physical currency will still exist. Short of a perfect, money-free utopia, there will always be people that want to pay other people without leaving a digital paper trail. Weber's Honorverse has physical (it's actually sort of a hybrid; digital monetary certificates encoded on physical media) currency for exactly this reason. $\endgroup$ – Matthew Nov 28 '19 at 16:11
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    $\begingroup$ @Matthew I'm not familiar with Honorverse, but I've always thought the only way for a digital currency to irradiate cash would be for the option to encode it onto physical media; like a prepaid bitcoin card or something - only not prepaid, not credit cards, and not bitcoin, but the idea of digital-on-physical $\endgroup$ – cegfault Nov 28 '19 at 16:18
  • $\begingroup$ Concerning distrust, if people want to stash/hide physical currency from the government and other parties, then why would the government issue physical currency at all? Would some other form of currency not backed by government bodies become prevalent instead (and who would accept this as legal tender)? $\endgroup$ – TheSlavMan Nov 28 '19 at 16:19
  • $\begingroup$ @TheSlavMan anything can be a currency if people trust it (silver and gold being the obvious examples). The government may issue physical currency for any number of reasons: (a) THEY are the crooks looking to hide their own money, (b) they believe in freedom and think people have the right to be anonymous, even if it means a minority will do illegal things, and so on.... really that's another question you could ask. $\endgroup$ – cegfault Nov 28 '19 at 16:25
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    $\begingroup$ @TheSlavMan, you're basically describing modern cryptocurrency. That said, with a space-faring civilization, you'll probably also end up with the equivalent of Switzerland; some bank/government that even criminals trust because they don't care what you do and you aren't in their jurisdiction. Again, that's how Honorverse does things. (BTW, you can read about it here; in the titular Chapter 10 — note that the HTML labels it "11" — look for "Banco de Madrid".) $\endgroup$ – Matthew Nov 28 '19 at 16:26

If your currency were to be made solely from an element that can only be obtained from the civilization's homeworld or home system they could be using physical currency to prevent counterfeiting by other civilizations.

Alternatively, a unknown alien civilization may laugh when you pull up your digital wallet and show them a big number because they don't value your currency. Physical currency on the other hand will always have material value even if trading with a civilization that doesn't care for your currency.


Maybe as a backup. The internet connections can fail for whatever reasons (in real life we just had an internet failure because an excavator hit an optical fiber cable).

Or for illegal reasons. Drug addicts, brothel visitors and contract killers maybe don't want to share their expenses and incomes with banks.


Regulatory Failure:

The central government has prohibited or failed to regulate (for whatever political reason) the interplanetary commerce and banking that makes instant payment trustworthy and reliable.

So merchants and travelers must carry cash, and cannot use local ATMs.

Of course, such severe mismanagement of the economy is likely to result in high crime and corruption...and indicates the likelihood of gross incompetence in other fields as well.


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