The idea of a cashless society is one of the topics that stirs up a heated debate when it comes to the digitalization of banking and society. On one hand, physical cash is the common denominator for corruption, tax evasion, money laundering and other various illegal activities. While the anonymity of cash acts as an enabler for the illegal economy, many fear that the lack of said anonymity will inevitably lead to an Orwellian society where individual freedom is limited.

In Sweden, which is leading the race toward a cashless society, negative attitudes toward the decline in cash usage has increased as the country progresses toward a cashless society. Although cash is still used extensively in several countries, such as Austria and Germany, the use of physical cash is diminishing across the board.

Even the U.S., where cash accounts for one-third of all purchases, the use of cash is declining. But at the same time, the amount of cash being issued is growing. Forty years ago there was approximately $80 billion of cash in circulation. Today, this number has increased nearly 20 times, to roughly $1.5 trillion in circulation. In the same period, the amount of $100 bills has increased from 25 percent in the mid-1970s to around 80 percent today.

The obvious explanation is inflation. However, the increase has exceeded inflation — with a good margin. According to economist and author Kenneth Rogoff, the world is drowning in cash, and it is making us poorer and less safe. He argues in his book The Curse of Cash that this phenomenon is not an American phenomenon, but also the case for every other widely used currency — and the primary explanation is that cash is the preferred means of value exchange in the black-market economy. His solution? Phase out the larger bills.

The prime minister of India may have forgotten to read the rest of Rogoff’s proposal that this should be carried out over several years; it was announced in November last year, with only a few hours’ notice, that all 500 and 1,000-rupee notes would cease to be legal tender. This caused widespread chaos, but was part of a “shock doctrine” tactic to dismantle the cash-centric black market, to cleanse the country of counterfeit notes, to further digitize the economy and to get more of the population onto the formal, taxable economic grid.

While India’s sudden and swift demonetization stirred up the country, several other countries are planning the same. The European Central Bank has decided to withdraw the €500 banknote from circulation by the end of 2018, and Sweden has done the same thing as a gradual exercise almost without anyone noticing. This is because cash is barely used in Scandinavia. According to the central bank of Sweden, cash transactions made up 2 percent of all payments made in Sweden in 2015, whereas in Norway, cash accounts for less than 3 percent of the total amount of money in circulation, according to the central bank of Norway. The Scandinavian countries also rank among the least corrupt and most transparent in the world.

This is not achieved without a sophisticated digital infrastructure, and, as a result, Norway has one of the most cost-efficient payment infrastructures in the world as a percentage of GDP, making digital card payments the most cost-efficient means of payment for consumers, merchants and society as a whole for even the smallest purchases.

We should not abandon cash without having some sort of decentralized safety valve that ensures individual freedom.

Even with numerous benefits, there are some concerns regarding eliminating cash altogether. With today’s payment-processing methods, a world without cash is a world where every transaction is traceable to banks, governments and payment processors. Cash also has the ability to constrain monetary policies by counteracting negative interest rates. While this is perceived as a negative trait of cash by central banks and governments, many individuals perceive cash as a safety valve that empowers citizens against an omnipotent central bank and government.

Getting rid of cash will not turn our society into an Orwellian dystopia overnight, but these concerns should act as a precaution that once we go fully cashless, it has the possibility of giving authorities the necessary tools to gain unprecedented control over their citizens.

To fully digitize payments without jeopardizing individual freedom, several central banks are researching the use of blockchain technology and distributed ledgers to issue digital cash. While some reject the idea of a digital representation of a national currency that ensures anonymity, the Norwegian central bank is investigating this possibility.

If one were to replace physical cash with an electronic representation, the best option is a fully decentralized blockchain that ensures that every individual has full sovereignty of their own means as well as anonymity if they choose. In a blockchain system, funds are held in addresses and users have keys to those addresses, thereby giving them control of those funds.

This is, however, easier said than done. Even though blockchain technology is decentralized without any central authority in theory, the truth is somewhere between theory and implementation. For citizens to adopt a digital currency issued by a central bank, privacy must be ensured for all participants on the network. Some may argue that this will not solve anything regarding criminal activities, but even with bitcoin, the possibilities to launder money using virtual currencies are limited and require cashing in and out in cash in order to entirely break the trail.

Although getting rid of physical cash seems like a good idea from a crime prevention perspective, the potential unforeseen consequences should not be treated lightly. The needs of the many should always outweigh the needs of the few. Cash may no longer be king, but we should not abandon cash without having some sort of decentralized safety valve that ensures individual freedom.