Ever hear of the plan to get rid of the Canadian penny? What about getting rid of paper money altogether? As it turns out, these two ideas are not so far-fetched.

Last year, Winnipeg Centre MP Pat Martin unveiled his grand plan for abolishing the Canadian one-cent piece. Since it costs more money to produce the penny in costly copper than it is worth as currency, the idea makes economic sense. Several countries, notably Australia and France, have already ended the use of their smallest coin denominations.

While the reason for ending the circulation of the penny is seemingly benign, it is part of a changing understanding of currency in this country and elsewhere. Indeed, the use of digital payment has risen to a point where it is now more popular than cash.

It has been a quarter century since debit cards were first introduced in Canada and their availability has fundamentally altered the relationship between individuals and their money.

In 1994, the role of debit cards was expanded with the launch of the Interac Direct Payment system, which first allowed consumers to make their purchases with client cards.

The popularity and availability of debit payment is astronomical, especially in Canada. Only seven years after its launch, payment for items on debit surpassed payments made in cash. Today, there are an estimated 550,000 Interac terminals in Canada which account for over $150 billion worth of transactions annually.

Moreover, the mandatory payment option for most large corporations, public institutions and government employees is the direct deposit method, where one’s pay is automatically deposited in their bank account. Few objections have been raised about this process, as it is far more convenient than traveling to the bank every two weeks to deposit a cheque.

But between a digital deposit and a few debit purchases, it is very possible for one to never see any of the money they have made. Currency is now far less tangible than it has been in the past and “invisible money” will be the norm for future generations.

While paper money has not disappeared yet, the influential U.S. Council on Foreign Relations has laid out the first steps of a plan to do so.

Along with the International Monetary Fund and the World Bank, global financial thinkers have called for the creation of geographically based currency systems similar to the Euro. The “Amero” would be the base currency for the Americas, while others would be adopted for all of Africa and Asia. By removing the national constraints of hard currency, it is thought that globalization will become a more efficient and profitable process.

Proponents of such currency amalgamation efforts claim that financial systems will be more easily regulated under this new method and that they would be less subject to the political instability of individual states.

While a world of only five or so currencies may sound attractive to some, the magnitude of such financial centralization is more than a little ominous.

Where currency goes from such a point is anyone’s guess, but there are a few hints about what the future may hold.

Pilot projects in Singapore, Hong Kong and the Netherlands have seen the expansion of transit pay cards into use within the wider electronic cash system – meaning that cash has been relegated to being a total inconvenience.

It may be only a matter of time before financial thinkers openly contemplate a world without physical money that you can hold in your hand.

Paul Figsby is a University of Winnipeg student.

Published in Volume 64, Number 4 of The Uniter (September 24, 2009)