CBS News has an article today about Sweden becoming a cashless economy - an interesting development as Sweden was the first European country to introduce bank notes. While the transition to a digital, cashless way of life hasn't been made official there, the story indicates a trend that could easily be adopted throughout Europe and in the U.S. in a short amount of time. I've included some quick excerpts from the CBS article below, then I'll explain why this is a major threat to individual freedom and personal privacy.From CBS:

In most Swedish cities, public buses don't accept cash; tickets are prepaid or purchased with a cell phone text message. A small but growing number of businesses only take cards, and some bank offices — which make money on electronic transactions — have stopped handling cash altogether....Oscar Swartz, the founder of Sweden's first Internet provider, Banhof, says a digital economy also raises privacy issues because of the electronic trail of transactions. He supports the idea of phasing out cash, but says other anonymous payment methods need to be introduced instead."One should be able to send money and donate money to different organizations without being traced every time," he says.

Mr. Swartz nails down succinctly the issue with electronic currency. That it is infinitely traceable. While our U.S. Passports have already been embedded with tracking devices by our government (as of 2007) so they can keep tabs on where we travel under the guise of protecting us, U.S.currency as of right now still leaves no trail and is not imbedded with an RFID chip. And yes, if you rob a bank and the bank note numbers are flagged it leaves a trail, but as of right now if you take $500 out of your bank, you can spend it where you like, in any state or country and no one would be the wiser. You can travel and purchase whatever you'd like without leaving an easily traced trail behind you that tells the government every single thing you have purchased and every single place you have been.Cash provides anonymity. Not that we advocate a criminal lifestyle, but considering the central theme of Liberty that this blog upholds, there are certain things that the government may frown upon that you, as an individual, may decide are right for you. And you can purchase those things in cash. In an electronic society, Big Brother's eye sees all, and unless you're trading goods or services, that eye will be watching you.UPDATE: There were just some excellent points made in the comments (so I urge you to take a look) but I'm going to input my comment response into the main body here. Another major danger of the cashless society is that when everything is digital, your accounts can be frozen or seized instantly. If you are suspected of a crime, your accounts can be frozen and with no cash assets, you are basically destitute.